Money Management - Smart Spending Habits

You don’t have to go without if you put yourself on a budget.  Spending smartly is all about making the money that you already have work harder so that you get more out of it.  If you take the stance that it is as an opportunity rather than a chore it’s easier to motivate yourself.  Think about it like this:  every dollar you save is another dollar that you can put toward your credit debt, your next vacation, your kid’s college, or a home remodeling project. 

Do you have financial goals?  Do you have a plan? Does the end seem far away?  There may be a way to reach your financial goals faster.  If you already have a plan, you should review it and tweak it where you can to get the most out of it.  Just one extra mortgage payment per year can knock five years off a typical 30-year mortgage – think of all that interest you’d save.  Stashing away $100 a month in a savings account (a reliable choice in any economy) that’s paying 2% interest becomes $6300 in just 5 years.

If you’re able to squeeze it, add ten percent more cash to one or more of your goals over the next year, such as paying that much more toward your credit card balance or into your 401(k).  The most important part is to make sure that it is something that you can live with; you shouldn’t put your life on hold while you pare your spending habits. 

To try and get more out of what you already have, try taking a look at six months’ worth of bank and/or credit card statements.  If you have it in you, 12 months is ideal.  Identify all of the transactions that are essential, like gas for your car, the utility bill.  After that, take a look at what is left and what you’ll have are purchases that you chose to make.   That doesn’t mean they were bad purchases, but this is where you can start to strategize and learn to spend less.

To start off with, pick one non-essential expense that you really love and keep it as your one luxury item.  The challenge then becomes to cut out or at least scale back on all of the other non-essential items.  If you’re used to going out to dinner and a movie every weekend, scale back to two weekends of the month and enjoy movie night at home instead.  You can still have fun doing things less expensively. 

Smart spending begins with spending consciously.  Question yourself any time you are about to make an impulse purchase.  Are you just headed to the mall to fend off the mid-week blahs?  Stop at that moment and picture your long-term goals; that might just stop you from spending at that moment.  Being conscious of your spending can help save you money, and can keep buyer’s remorse out of the picture.

Cut your family’s expenses by ten percent.  Often, you can easily reduce you cell phone bill or your cable bill with a phone call or even an online chat with your service provider.  Switch to energy efficient appliances and get a programmable thermostat; the up-front expense will be worth it over time with your lower utility bills. 

Make is easier to accomplish your financial goals by setting up automatic monthly payments and never have to worry about late payments or penalty fees. Set up automatic deposits into your retirement savings; move money automatically every month from your checking to you savings account or set up automatic payments to your credit card to make sure you keep chipping away at the balance.

Your financial destiny should be more like an adventure and not a burden. You are in charge of your destiny and if you make the right choices, you can get your finances in order and still enjoy your life. Remember this saying: Giving up something of lesser importance for something of greater importance is not a sacrifice, it’s a bargain.