Saving Money This Year
We’re in the midst of the holiday season, checking final items off our lists and buying last minute gifts for family and friends. It can be easy to abandon your budget in December. But as we look to the new year it’s the perfect time to reassess your spending habits and find new ways to meet your financial goals. We’ve collected some of our favorite budgeting advice from friends and family and put it together in one post. As you think about your financial goals and saving more money this year, we hope these tips will help you on your way!
Get Real About Your Expenses
For one month, everyday, write down your expenses. We like to do this on paper or on the Budget layout in our planners. Each time you pay a bill, write it down. Every time you swipe your card, write it down. Write down where you spent money and how much you spent. At the end of the month categorize all of these expenditures into three categories: Essentials, Extras, Emergency. Essentials include things like rent, mortgage, utilities, insurance, internet, groceries, car expenses, and any fixed monthly bills you are paying. Extras include things like restaurants, coffee, TV or reading subscriptions, random Amazon purchases, entertainment with friends, tickets, etc. Emergency might be things that came up without warning such as replacing an appliance, etc. Once you categorize your expenses, take a close look at where your dollars are going. This exercise is time consuming but very important in uncovering places you’re spending more than you want to!
Adjust Your Spending
Look at places where you can make adjustments in your monthly expenses. Your Essentials category is going to be quite fixed, but you may have a little wiggle room to shop around for more affordable insurance and internet. You can also look closely at your grocery costs and see where you might save. We find meal planning, reducing the number of trips we make to the store each week, and sticking to the essential items on our lists helps us save on groceries each month. You can also shop discount stores and utilize any sales your local store runs. Commit to cooking at home and only buying what you need. Once you know what your grocery budget is, try to stick to it each week.
The Extras category is fully in your control. Before you go too crazy cutting everything in life to save more money, we recommend budgeting for one fun night a week. This might be a night you order food delivery, go out with family or friends, or do something special. Having a fun evening budgeted will give you something to look forward to and make the other nights you stay home easier. If you like to go out to dinner or coffee with friends often, think about other ways you can spend time together without spending money. Ask your friends if they’d like to go for a walk or hike or come over for a cozy, simple dinner at home.
Keep tabs on your subscriptions. You may have subscribed to things you’ve completely forgotten about or aren’t using anymore. Cancel anything you’re not utilizing. We also recommend unsubscribing from shopping emails. Tempting sales emails are hard to resist when they are rolling in everyday. Unsubscribing will save you money and clean up your inbox.
Slow down spending when you’re on your computer or phone. You can remove your saved credit card info from websites. This will force you to get up and find your credit card when you want to make a purchase. Practice window shopping online. This could mean filling your cart with what you want and then exiting out of your browser before checking out. Before you buy something, ask yourself, Do I need it? Do I love it? Or do I simply like it? Do I have something like it already that serves the same purpose? And instead of declaring “Yes! I love it!” and checking out instantly, force yourself to wait to purchase. Wait at least a day or even a week. We like to use the Notes app on our phones to jot down items we want to buy. You can also use a website like Pinterest and create a “Do I need it?” board. Save items you want to buy in one place. Chances are most of the items you bookmark will disappear from your Want/Love list once they are out of sight.
Save, Save, Save
Our number one budgeting tip is to set up an automatic withdrawal on payday that sends money to a high yield savings account. When you get paid, pull what you can reasonably save for the month and put it directly into savings. Set it up to automatically go to your savings each month. If you don’t have the money to spend, you won’t spend it! Watch your savings accumulate quickly!
If you have debt, pay it off! Start by paying off your debt with the highest interest first and go from there. It may make sense to consolidate your debt. If you have extra money or come into a bonus or windfall, use it wisely and pay down your debt.
You can have fun with saving money and try a challenge like a no spend week or month where you cut all spending except for things in the Essentials category. You can also try the 100 Envelope Challenge. This challenge will tell you how much to save each day for 100 days.
Think About Your Future Self
This is a great exercise. Sit down with your notebook and take 15 minutes to write about your future self. What does she look like? What does she love? What does she value? How is she living life day to day? When spending money on the non-essentials in your life, think about how this will benefit your future self. Maybe spending money on an exercise class you love will benefit the health of your future self. Or maybe your future self wants to make a big purchase down the road so your present self might have to say no to the shirt an influencer is convincing you to buy on social media. Always remember what you’re working for and toward!
We hope you’ve gotten a few ideas that will help you save money in the new year. What are your favorite ways to save money? Do you have any tried and true budgeting tips to share? Tell us in the comments below!