“I know how to handle my money. I’m on top of things.” A lot of us say that. “Budgets are for wimps!” Some of us say that too. But a lot of the time, our bad spending habits go unnoticed. You could be spending $25, $50 or $100 a month on “those little expenses” that don’t really count. Do they?
It all Adds Up
Most people have a solid understanding of their larger expenses, the rent or the mortgage, the car loan, or power bill. Few people see where their money goes every day. Let’s say you stop for a cup of coffee each morning on the way to work, that’s $2.00 easy. Buying something to eat on the way into the office once a week is another $3.00 and that afternoon trip to the company’s vending machine – $1.25 each day. That’s $19.25 a week or $77.00 per month. It’s easy to lose sight of this sort of spending, mostly because we don’t see it. It won’t be so easy to reduce your car insurance bill by $77.00, but you could have that money back by stopping a few bad spending habits.
What to do Instead
Coffee is a food group in our house, like vegetables, meat and dairy. Instead of heading for that expensive place on the corner, why not take your own? A 28 ounce can of good French Roast coffee (comparable to that coffee place) will cost you about $9.00 and it will make 120 12-ounce cups. That’s 7 ½ cents per cup (about 12 cents per cup if you’re the milk and sugar person).
Track All of Your Expenses
It’s impossible to hold expenses in check and stay on budget without knowing where your money actually goes. So much of it is invisible, just like that $77.00 missing from your pocket each month.
- Sit down for 15 minutes with a cup of coffee, that you brewed yourself and make a list of what you spend each day.
- Multiply those expenses out by the week, adding the things you don’t buy every day, and make a monthly total to keep costs in-line with your other bills. Those people who still smoke may wince at the rising costs of a pack of cigarettes, but seldom see that they might spend $150.00 per month or more for them!
Tracking expenses can be hard. Fortunately, technology has a fix and there are software programs and smart phone apps that can stop bad spending habits cold.
If you’re an iPhone user you can load the FREE Mint.com app. You can create and keep up with your budget, track your finances by recording expenses, and keep track of your credit cards and even your investment. Mint was named “Best Finance App” by the 1st Annual App Awards and it made the list of TIME Magazine’s 50 Best iPhone Apps of 2011. Other apps include Expenditure, Moneybook and Toshl. If you use an Android-based phone, Mint has a version for you and there’s Hello Expense and EasyEnvelopes too!
Stop Spending more than you have
It’s easy to spend more money than you have. ATM cards can be a big problem. You go to the machine, withdraw your cash, and read your receipt; you nod, you put the receipt in your pocket and think you know how much money you have. You don’t.
- Check your bank balances regularly on-line or against your statement. Justify your check book EACH TIME you make a withdrawal or a deposit.
- Don’t rely on ATM receipts. They don’t include outstanding checks you’ve written and on-line payments may not have posted.
Avoid Impulse Purchases
Impulse buying is one of the worst bad spending habits. You see something you want: the newest cell phone, that blouse in the window or eating out when you shouldn’t. Supermarkets are terrible places for impulse buyers. Plan your weekly food purchases. Make a list and stick to it.
Retailers make the things they sell enticing! It’s their job. Yours is saying no until you’re out of the woods.
Using credit when you have cash
Credit cards make spending easy. It doesn’t feel like you’re paying for an item, because you’re not. That comes down the road; only – you’re in debt because you’re at the end of that road. Use cash for your daily purchases. That will feel like paying, because you are.
Putting the Professionals to Work for You
Sometimes people have a very serious problem with debt. That’s when it is time to get sound advice and put our professional debt counselors to work for you. Our counselors have the experience to negotiate your debt down, often to a fraction of the original obligation. They will develop affordable payment plans. That doesn’t come from a phone app. It’s talent and experience.
We don’t have any upfront fees. You pay nothing unless we negotiate a payment plan that you approve. If we don’t, you walk away. It costs you nothing for letting us try!