Whether you are barley making ends meet, trying to save money, or wanting to clear your debt, it is important to be responsible with your finances. First you need to understand that money saving and frugal living all start with your mindset. Instead of treating these money saving tactics as living restrictively, start thinking of them as being beneficial.
Here are some great actionable tips for YOU to get back on track with YOUR money this year!
Get in the habit of congratulating yourself every time you accomplish anything. Celebrate your wins, no matter how big or small.
If you controlled your impulse today by saying “no”, give yourself a pat on the back.
If you saved $100 this month, buy yourself some pizza. Haha.
Anything is possible if you just set yourself some goals and follow through with an execution plan.
Celebrate small wins – Create incentives – Keep motivated – CRUSH GOALS.
Daily goals are changes that don’t seem like a big sacrifice at the moment, but add up over time.
Monthly goals are bigger changes that you want to make that reflect on each weekly and/or daily goal you set. You should be able to check off your goals at the end of the month because of the impact your daily goals will have on them!
These are your long-term goals, which are basically your ‘main goals’ that you’re working towards to begin with. Every goal that we make (daily, weekly, monthly) are incremental goals to conquer this debt of ours!
Look at your income.
We glance at our finances monthly – but we manage them biweekly. It is easier for us this way because we get paid biweekly!
Figure out what your monthly/biweekly earnings are and take note. Does it fluctuate? Is it always the exact same?
Check your bank statement and get your highlighter out.
Can you distinguish between your wants and your needs?
For me, I consider everything from groceries, rent, phone, power, right up to my blog expenses apart of my needs. My wants range from Netflix, Gym membership, Crave TV add-on, and so on so forth.
*Separate your outgoing bills and automated withdrawals. We do this because if not, the bills that automatically come out of our account often go unnoticed and that doesn’t help us keep track of our money.
Now that you’ve defined what your absolute needs are versus your wants and extras…
Look at your spending habits.
If you are buying a $2 bagel from the coffee shop every weekday… that’s $40 a month, which is $480 a year. At first, challenge yourself to spend less than half of what you are spending right now on extras. In this bagel scenario, instead of buying 5 bagels a week…buy 2! By the second month, try buying your bagel once a week…or maybe even cut it out and treat it as a TREAT once in a while.
Cutting out those daily bagels or coffees won’t seem like a big step, but when you look at what you’re saving and accomplishing over time (monthly and yearly)…it’s HUGE!
What can you cut back on, cut out completely, or trade out?
Don’t worry, you don’t need to make big drastic changes. Start with the small things first. This is all about changing your lifestyle habits and it isn’t an easy thing to do. Ask yourself some of these questions:
- Are you in a position to spend $20 a month on a monthly subscription?
- Do you need cable? Or do will Netflix do just fine?
- Is this item beneficial to your over all goals?
- Is this item going to delay or prevent you from achieving those goals?
- Will a cheaper brand do?
Some of my personal cut backs include:
- We cut back by 72% on our coffee! WE WENT FROM SPENDING $2,880 ON COFFEE PER YEAR, TO $336. We used to spend $8 a day between Hubby and I. THAT IS $240 A MONTH! We now spend roughly $68. ($25 a month on a tin of coffee, about $40 a month on milk, and maybe $3 a month on sugar.) Mind=Blown.
- I pay an arm and a leg for my cell phone bill which is just unnecessary – so I have been putting money aside monthly in order to pay off the remaining balance of my cell phone itself, and then I am switching to a cheaper plan.
- We called our cable provider to remove cable all together and just keep the internet, but it was cheaper to keep the bundle we have, versus cancelling it and keeping only the internet. They ended up giving up Crave TV for free though! There are other options that we are looking into as well, like checking out other service providers.
Set money set aside for the GOOD STUFF.
Life is about being happy. The whole purpose of ‘getting our finances in check’ is to be able to live freely, but frugally!
We set $20 a week aside in our ‘Fun Money’ envelope, in case we want to go for ice cream, go see a movie, go for a coffee or lunch date. Whatever it is, make sure to set a certain amount aside that way you don’t limit yourself or feel like you are living off the bare minimum.
Brainstorm ways to earn more income.
Earning more money could mean spending more money – but not if you’ve got these goals to look forward to. Pay attention to your goals and intentions. You can earn some extra side-cash to help get you out of debt, to keep you from paycheck to paycheck, to help give you extra “Fun-Money”. There are plenty of ways to earn extra cash.
- Turn a hobby into a small business, like a DIY based business, homemade beauty products, the opportunities are endless.
- Become an independent distributor by selling products for another business…there are several companies out there, like Scentsy, Lipsense, Norwex.
- Make money online by doing surveys, sign up for Swagbucks
- Sign up for Ebates, and earn cash back on things you were ALREADY going to buy.
- START A BLOG – There can be some REAL money in blogging if you know the right steps to take. The best article I’ve ever read about starting a blog is here
Create a buffer in your bank account.
What does this mean, you ask? Well… to simplify it:
Don’t ever let your bank account go to a $0 balance. Pretend that the first $100 in your account is really $0. (The higher buffer the better). I actually learned that from an old boss of mine.
You can’t escape it…there will be times where you forgot to budget in this or that. It has happened plenty of times where I’ve went in my account to see I was negative because I forgot that this was due to come out. There is no need of it as it just creates extra stress. So we’ve created a buffer for those ‘you-just-never-know’ moments. Try it!
Pay your debt off as aggressively as possible.
The quicker you pay your debt, the quicker you will achieve ANY goal. If you don’t have any debt, then skip this, or treat it as a life savings fund.
Pay it off as fast as you can – because DEBT will always leave you lingering behind. This is YOUR life…YOUR money… Give yourself a minimum dollar that you know you can COMMIT to pay off your debt with.
We are all at different points in our lives right now…YOU decide what that dollar amount will be at the very minimum every month. The more you can put towards your debt though, the better.
Build an emergency fund.
Emergencies are usually out of our control – but we are responsible for planning for them.
Keeping $1000 in an emergency fund is smart…I mean, who expected that their car was going to break down and be very costly next month?
Don’t have $1000 laying around to add to an emerg-fund? I don’t either. But no matter WHAT your financial situation looks like, start putting money toward your emergency fund now. Even if you’re putting $20 per pay aside. That’s a start!
I’ve set up automatic biweekly payments to my emergency fund that way its DONE and DONE, without me even thinking about it. You should automate any savings account you may have. Out of sight, out of mind, right?
Your financial situation may change from month to month, so whenever possible, revisit your budget and make changes where you need to.
Create a savings plan and STICK TO IT.
Yes, we’ve talked about the emergency fund – but what about your savings for that trip you’ve been dreaming about? Or that expensive purse you want, or more importantly, a LIFE SAVINGS?
Again, figure out a dollar amount that will work in your budget that you can automate every single pay/or monthly to your savings account. You should also manually have savings too, to keep yourself accountable by committing this amount here, and this amount there.
What are your finance goals for 2019? How are you going to execute them? Create some goals and let me know how they turn out!