Getting ahead financially.
Have you already stopped reading? We don’t blame you. Money is hard, especially when your home budget has already spiraled out of control. But with a New Year comes a fresh start to tackle life in a new way, and for so many of us, money and budgeting rises to the top of our list of New Year’s Resolutions and goals.
Let’s face it – budgeting can be one of the hardest things we do in this modern life, but it’s essential to be financially robust. And it’s important to have stable finance for when unexpected things happen.
But it’s also important to live your life and to chase your dreams! Whether that’s traveling, buying a vintage motorcycle, or taking watercolor classes, things that enhance our life and well being often cost money. And they don’t always fall within your home budget.
By starting with these basic tips and applying them consistently throughout the year, you might learn that the small changes you make in daily life can add up to significant savings over the long haul.
1) Get It On Paper
Starting is often the hardest part! This is especially true when it comes down to the brass tacks of typing out your income, spending, and bills. Because numbers don’t lie.
It’s important to start the process by getting it all out of your mind and out in front of you to analyze. Pen and paper work just fine, or if you’re more of a tech-driven person, use an Excel spreadsheet. Be sure to share it with your entire household so everyone can chime in on what entails realistic spending as well as have an idea of your actual financial situation.
2) Be Realistic
Your mortgage or rent doesn’t typically change over the course of 12 months. Neither will your insurance, car payment, or school tuition (or debt). Those are monthly costs that are locked in.
But energy bills, groceries, incidentals, clothing needs, car repairs, credit payments, car fuel, tolls, and other household expenses? Those will fluctuate, which means these are the ones that can be dialed down.
Just be realistic!
If your current numbers show you’re spending $300 a week on groceries, then don’t place an unrealistic expectation on yourself for the coming year to spend only $100 a week. Find a middle ground – such as selecting a $225 a week as your budget for food. If you are able to reign in your grocery spending, that $75 a week becomes $300 a month – which tallies up to $3,600 a year! That is significant!
3) Be Prepared to Sacrifice
Getting ahead requires sacrifice on many levels. It means holding out 6 more months with your current pair of boots rather than buying new ones, just because you think you can. It means avoiding fast food or ordering take-out from your favorite Thai restaurant, and instead eating leftovers in the fridge.
It could also mean saying “No” to dinner dates with your significant other at your favorite dining establishment(s). Rather than spending restaurant prices for your meal, look for inexpensive options like taking sunset walks with a small picnic basket.
4) Pay Off Debt
Debt can be the black hole that prevents you from getting ahead. Simply put, by only paying the minimums due on your credit card(s) or student loan(s), you end up paying hundreds if not thousands more dollars in interest.
Whatever your minimum payment(s) might be, budget to pay more than what’s required. Trust me – anything helps. The sooner your shatter your debts, the sooner those monthly payments return to your own pockets.
5) Make Clear Commitments
You’ve done all the hard work by planning this home budget, so why not commit to it?! Granted, it requires discipline and commitment, so you should cultivate a mindset for success!
Plus, when you actually keep to your budget, you’ll see a wide range of long-term benefits, including having more space in your life for everything you’ve avoided doing because of your money troubles.
YOU CAN DO IT!