Whether you want to break the paycheck-to-paycheck cycle, get out of debt or live the life you want – you have to have a budget. Yes, I dropped the B- word and before you let that inner voice tell you that budgets are restrictive and turn away from this post or jump down to the ways to save, let me say this…. A budget allows you to stop wondering where your money went and tell it where to go. That’s pretty empowering! When you don’t have a budget you’ll most likely find yourself in debt or not being able to do the things you want to do – well that’s restrictive. Bottom line – you need a budget. If you need help creating a budget email me and I will gladly help you out.
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Write it All Down
It’s hard to know how much you can save if you don’t know where and how much of your money is being spent. After everything is written down you may consider reducing the amount of times you do things out of habit or eliminating them altogether. Personal finances are personal so I’m not going to sit here and tell you to stop your morning $5 coffee run to Starbucks because its adding up. I mean, it is adding up but the real question here is whether it is important to you to do every morning, can eliminate it, or at least reduce it? If you can reduce the amount of times then by how much? However, if it’s a must then okay – but you need to include that in the budget and find other areas to save. There are some flexible expenses that are non-negoitiables. That is okay but first you have to put it all into perspective by writing it down. You might just find out that that coffee isn’t that important to you in light of your goals.
I like to use an Excel sheet that I created that tracks my cash flow. When I first began this journey I sat down and tracked where my money was going. My mind was blown away to find out that a large amount of my money went to debt, eating out and subscriptions – in that order! DEBT?! I was working hard only to have to give it away to a debt collector. The reality check made me want to puke a little bit. And eating out? That meant my hard earned money was literally being flushed down the toilet. After writing it out I identified my goals and assigned my money where I wanted it to go.
Set Goals
Once you have your cash flow then you can set financial goals. My goals are to save more, reduce debt, increase my credit score. You can see how I do that in my post Financial Goals for Beginners. Once I had my goals identified it was easier for me to make financial decisions. Since one of my goals is to reduce my debt and eventually be debt-free it makes it so much easier to say no to that very enticing Amazon credit card offer, store cards and new credit cards. The best part is that I feel in control. I found money I was wasting and created a budget that positions me to be out of credit debt in 16 months. Goals allow me to stay focus. A budget keeps me on track. You have to set goals and a budget for long term success.
5 Ways to Trim Your Budget this month
Here’s 5 things that can trim your monthly budget but don’t let your savings get sucked into a vaccuum. It’s great to save money but you need to know where that savings is going or it will be gone before you know it. Apply that savings to debt. Or will that savings keep you from living in a defecit? Either way you need to identify where you want your savings to go. Be intentional with your finances – write it all down, set goals, create a realistic budget and stick to it.
Cut the Cable
We always thought cable was expensive and we were barely home to enjoy it. When the kids were younger we did a lot of Red Box movies on the weekend. Now that they are older we have Netflix. Honestly, there’s so many apps that are cheaper than cable so it really is an unnecessary expense. If you have Amazon Fire TV Stick, or gaming system then you have access to many of those basic channels for free. But if you are more into premium channels like HBO, you can subscribe to them directly through the app for less than a cable subscription.
Cancel Subscription Services That No Longer Serve You
When I calculated all my subscriptions I was mortified that so much of my money was going to them. To top it off a lot of them weren’t even being used anymore. I never thought about most of them because they were automatically being taken from my bank account. They clearly weren’t serving me and therefore had to go.
Re-evaluate your subscriptions by checking your bank account for monthly automatic debits. If your bank doesn’t have the option to filter out transactions like that begin with your smartphone. With the Iphone you can see all your subscribtions and most of them can be canceled with a tap of a button. For subscriptions not on your phone – it may require some investigation and fine tooth combing your accounts but it will be worth it in the end.
Refinance that High Interest Rate Car Note
Some car payments are in the high teens. This was me after a blow to my credit score and being out of work for six months. Once I raised my credit score I refinanced my high interest car loan and reduced the monthly payment by 200 dollars. But, guess what? I didn’t stop there. Each month I apply $25 from that $200 and apply it to my car note so I can pay it down sooner. One hundred goes to offset my car insurance that increased once I moved and $75 goes to doing something fun with the kids because that is important to me.
Consolidate Your Debt
Do you have debt on multiple credit cards or through different loans? Then look into consolidating your debt into one card or one loan. Doing this eliminates monthly interest payments and can reduce your monthly budget significantly.
Eat at Home
Yes, it is so convenient to eat out or grab a pizza on those busy weeknights but it all adds up. One outting alone for a family of 5 is costly much less multiple times a week. This was a big expense for us. Eating out would cost us between $60 – $100 on average. That was just about a week’s worth of groceries in ONE go.
Eating at home doesn’t mean you can’t enjoy a convenience meal on a busy weeknight. Pick up pizzas or even Chinese food from the frozen section at your local grocery store. It is cheaper than going to a restaurant and easy to prepare.
Still want to go out to a restaurant or grab something on the road then look for deals. Applebees has value packs like 2 entrees and 1 app for under $20. Some restaurants offer kids eat free on select days with purchase of an entree.
Want More Ideas to Save Money?
Friend, these are just my top five but there’s so many more ways you can save. You can meal plan, shop with a list, shop around for car insurance, lower your thermostat in the winter and raise the air conditioner in the summer. Being financially stuck isn’t final – but it does require intentionality to get unstuck.
I’m not a financial advisor but I do love talking budget and savings…feel free to email me with any questions.
~XOXO