Now that we have a brand new year, and with it, comes a renewed effort to get our finances back into fighting shape. Whatever your motivation is, whether it’s to raise your credit score so you can buy a new car or house, or if you just want to stop living paycheck to paycheck, there are a myriad of tips and tricks you can use to reach your financial goals by the end of this year. The key word is frugality.
You will be amazed at how much money you can save by cutting back on expenses a little at a time. Some changes are so minimal that you may not even notice them, or they are insignificant enough that it will be no trouble at all to get used to life without the little thing(s) you once thought you couldn’t live without. Here are a few ways you can strategize your spending that will help you reach your 2014 financial goals.
Make a Budget
The first tried and true step to achieving your financial goals is to make a budget… and stick with it. Don’t forget to include every expense, including the following:
- Expenses that are automatically deducted. You may not think about them because you never see the money, so to speak, but these expenses have a direct impact on your bottom line.
- Expenses that may not be fixed now, but will be soon, including things like alimony or child support. If you don’t know what to expect in terms of the amount you’ll be paying, use online tools to help you, such a child support calculator. Even if you don’t have an exact figure, coming close to it will help give you a good idea of what to expect.
- Expenses that may be short term, but significant. For example, if you live in North Carolina, and are getting a divorce, you’ll need to add the cost of a Raleigh divorce attorney into your budget.
Obviously you will include everyday costs of food, utilities, and the like, but the budget will help you see where your money is going. With that information, you can begin to scale back on your expenses and find ways to spend more frugally. Here are examples of a couple of common financial traps that can sideline your goals.
Avoid the Mall
Many people do this as part of their natural inclination. Malls are crowded, overpriced hassles that siphon money from people. If you’re looking for a one-stop shopping experience, try Amazon or a price comparison site. Better yet, download a price comparison shopping app and make it a no brainer. You’re guaranteed to find more options than any mall can offer, and since vendors are actively competing for your business, you can find the best deals, with many offering online-only coupons to draw in new customers.
Cheap (or Free) Entertainment
Forget about going to the movies. By the time all is said and done, you and your date could be out $40 to $50. Instead, check out a movie (free!) from your local library, or download one online on YouTube (many are free). Redbox offers kiosks as well as online movies, and you can watch unlimited movies on Netflix for $8 (currently) a month. By staying home, you’ll be keeping that $50 in your pocket.
Do you have a hard time keeping your kids entertained? There are endless ways you can have fun with your kids for free, or very little money. For example, instead of taking them to the movies, have them each choose a movie from the library, make popcorn at home, and you can all sit around watching the movies in the comfort of your own home. Little to no expense, and no one had to change out of their pajamas!
Now Invest It
After all is said and done, the money you save can then be invested to work for you, rather than you working for it. Depending on what type of debt you have, you can either invest or save all of your extra income, or you can use it to pay off debt, such as high interest credit card bills (and then cut up the cards!). Each situation is different, so research investment information to determine what will work best for you.
Living frugally isn’t hard. It’s just a matter of cutting a few expenses that you could have lived without all along. In the end, the payoff can be literal in the form of being debt free, buying a car or a house, or going from living paycheck to paycheck to actually having a bona fide savings account. All it takes is a budget, a little fiscal understanding, and a bit of motivation to reach your goal!
Want a better plan for 2014? Give Jay a call today at 866-594-9919 or CLICK HERE.