It’s a new year, and in an effort to do better and meet my financial goals I started doing some serious examination of my finances. I looked at my spending habits for the last two months and figured out where all of my money was going and ranking them as either “bills” or “other expenses”. Items labeled as bills are expenses that I really can’t do much about as far as reductions or extra discounts, which can be referred to as “fixed” expenses. Expenses that fluctuate may include groceries, entertainment, gas, credit card payments, and beauty services which include getting my hair and nails done. Analyzing my finances gave me a real look at how much I spent on entertainment, eating out all the time, and splurges at the makeup counter. Once I added everything up, I realized that spent most of my extra funds on restaurants and impulse buys.
There are various strategies that you can use to save money, but the best method for me is automatically taking a sum out of each paycheck and putting it in my savings. If I have to move the money over manually, it’s easy to procrastinate or forget. Excess money in my account may lead me to believe that I can splurge more when I shouldn’t be. New expenses like my student loans have made their debut so I am extra cautious with my spending until my income increases.
Here are some things that I did that may help you save money to reach your short and long-term goals:
· Set up your bank account(s) to automatically move money into your savings account.
· Increase your income, this can include side jobs that supplement what you currently make
· Track spending habits with a spending journal, I recommend this journal it’s slim enough to keep in your purse if you want to track expenses immediately.
· Work with a financial advisor
· Write down your financial goals and the amount of money it will take to reach them
· Find ways to make money off your savings
· Cut your credit cards with annual fees, high-interest rates, and minimal rewards
· Pay off your credit card
· Use a credit card that has low-interest rates, higher rewards (i.e. mileage), or cashback
· Invest
· Take a class, course, or obtain a certification that may put you in a higher income
· Set a budget for expenses outside of bills and use cash. Once the cash is gone, that’s it!
· Consider keeping one credit card for emergencies only
· Check your bank account daily to reduce fraudulent charges
· Money saving challenges work when you take action and remain disciplined
I’ll do my best to update you on my progress on a quarterly basis! I have some exciting things that I am saving for in addition to new income opportunities! What strategies are you using to save money or reach your financial goals?
