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Whenever I hear someone say, "Money buys happiness," I cringe. It may get you what you want but that "happiness" can also land you in a world of financial trouble if you aren't prepared.
I may not be the best person to talk about spending and saving money, but I am aware of my financial situation and I am taking action to reach financial security. In recent months, as I prepare for two international vacations and to move into a new place, I have found myself stressing incessantly about money.
Will I have enough? Will I be able to save the amount I need in the time I have?
If you are having the same worries, I have come up with four questions and some possible solutions for you to utilize. Be prepared, some tough love is coming your way.
1. How much am I making?
Is my income enough to get by? Do I need a second source of income?
Knowing how much money you make and living within those means is the key to financial security. If you don't think you can live comfortably with the income you have, consider getting a second job or finding a job that pays more.
Striving for the life you want takes time and sacrifice. You need to be prepared to do what it takes.
2. What am I spending my money on?
"Why am I always in the red? How come I'm out of money in the middle of the month? Why don't I have money for my bills?" You may ask me.
I'll counter that with, "What are you buying? Why did you buy that over using that money for your bills? Are you prioritizing your needs over your wants?"
I've never experienced the embarrassment of being in a grocery store and having my card rejected because of insufficient funds. That is because I prioritize my spending.
I make sure all of my needs are met before my wants. Sometimes my needs greatly outweigh my wants and I go without something for a month. That's the sacrifice I make to be able to thrive. If I can do that, you can too.
If possible, pay your monthly bills first, always, always, always. They determine whether you will have electricity or water for the month. If they're spread out throughout the month, make sure you keep enough money in your spending or savings accounts to pay them.
TIP: Putting your bills on auto-pay makes things way easier. Set alarms on your phone for when a bill is due, that will help you stay aware of an impending hit to your bank account.
After that, get the necessities like groceries and medicine. Then throw some money into a savings account. Build up that 'Big Buys' or 'Emergency' fund so you're prepared for anything.
If there is money left over, buy yourself that pair of shoes you saw at the shoe store.
3. How can I cut down on my spending?
This is where sacrifice rears it's ugly head. Sacrificing the things you want but don't need in the name of saving money is hard, but in the end, worth it. You just HAVE TO MAKE YOURSELF DO IT. Think long-term, not just for now.
- Save your receipts. It can be annoying trying to keep up with receipts but they give insight as to what you spend each month. They're a good foundation for habitual budget planning.
- Put yourself on a budget. Only give yourself a set amount of money to spend on certain things. It's a hard habit to form but I know you can do it. I make myself sit down, and write out my bi-weekly budget. I have budgeting tools saved on my money board on Pinterest for your use (link is at the end of the article).
- Cancel subscriptions. Cancel those magazine and video streaming subscriptions you don't use anymore, halt those food delivery kit services. If you don't use them or have cheaper alternatives available, get rid of them. They may seem cheap but they add up over time.
- Lower your internet/cable plan. You may THINK you need a billion gigawatts of usage with your three devices but truly, you don't. Lower that plan to something reasonable.
- Coupons. You see those coupon people on TV and think they're crazy. They actually save money and sometimes they even get money back. They aren't crazy. They're geniuses.
- Find free things to do in your community. If you like going out on the town and having a good time, look up free events in your city. There's always something going on, especially in the bigger cities. All it takes is a Google search.
- Take public transportation or carpool. If your city has a great bus or rail system, utilize them. A weekly bus/rail pass could cost you less than a tank of gas depending on geography. If you live close to a coworker friend, consider taking turns driving each other to work.
- Go without. You already have fifty pairs of shoes, you can go a while without buying another. Ask yourself, "Will I die if I don't buy this pair of jeans? Do I really need it or can I put that money into savings instead?" It's easy to feel sorry for yourself when you have to walk by the ice cream shop instead of go in. But, in the end you've saved yourself $5 and a night's worth of calorie guilt.
4. How can I make saving easier?
Saving money is psychologically hard, but the act of saving doesn't have to be.
See if your bank has online banking with the auto-transfer feature. This is a tool for transferring money between your accounts. You can schedule money transfers daily, weekly, bi-weekly, monthly, etc...I use this feature bi-weekly. As soon as my paycheck goes through, a set amount goes into savings automatically.
I know coin jars are a thing of the past but maybe it's time to bring them back. Save all of those coins you find in the couch and on the street, put them in a jar and cash them out when it's full. It could be a fun project to do with your kids.
Have a goal in mind. Want a new car? Find out what kind of down payment you need and start setting aside a few dollars here and there. Need it in a certain amount of time? Do some math and adjusting to your budget to see what you need to put back to accommodate.
TIP: Stay away from credit cards! They may help you get a good credit score but they can be dangerous and make it hard to save money. There are other ways to better your credit score.
Pinterest is a money saver's dream. They have FREE printable budgeting tools to help you get organized. There are saving challenges you can do to make it a little fun and to keep you accountable. Check out my money board to see if you can find some inspiration.
If you truly struggle with money and over-spending, I suggest seeking advice from a financial planner or some kind of professional. They can help you think of long-term goals to reach like retirement or buying a house.
Remember, money does not buy you happiness. It may make your life easier but it could equally make it ten times harder. Be careful how you use it.