Tag: finances

Avoid Common Budget Busters And Increase Your Savings

Published on by gamechangerjoLeave a comment

If the balance in your savings account isn’t growing fast enough, a common budget buster might be to blame. Sadly, you’re not alone in missing your financial goals. According to a June 2014 survey conducted by Bankrate.com, 75% of Americans have no savings and live paycheck to paycheck! Are you one of these?

Thankfully, there are steps that you can take to get your finances back on track. Use these strategies to stick to your budget and achieve your financial goals:

  1. Avoid impulse shopping. If impulse shopping is your weakness, resist the temptation. If you go shopping for a needed item, take a responsible friend with you to help strengthen your resolve. Make a list before you shop and then buy only the items on your list. Leave your debit and credit cards at home and only bring enough cash to pay for the needed items.
  2. Seek to understand what triggers your overspending behavior. For example, if you find that you are more tempted to abandon your budget when you’ve had a difficult day, only go shopping when you’re well-rested and under less stress.
  3. Get organized. Adopt a new method of organizing your important papers and receipts. Do “forgotten bills” seem to constantly surface and derail your spending goals? If you forget to pay a bill, you may have to pay a late fee and interest. Those extra charges can add up quickly! Set reminders to cancel memberships and other subscriptions before they auto-renew to avoid paying for services you no longer use.
  4. Shop for better rates. Just because you’re satisfied with your current service provider doesn’t mean that you shouldn’t periodically shop for a better rate. Every few months, review your expenses and seek ways to reduce the amount that you pay for many common services, such as your telephone bill and car insurance. When you contact your provider, ask if you’ll save money by bundling services, or cut back on features that you seldom use. While your provider may not reduce your bill, it doesn’t hurt to ask.
  5. Watch for unusual spending. Periodically review your expenses and see if you can identify an area where you frequently overspend. Most of us typically overspend in a specific category. Challenging categories for most folks include clothing, entertainment, transportation, travel, food, and housing. Once you’ve identified a category of expenses that seem to break your budget, seek ways to make smarter, less expensive choices when you buy things in this category. Reducing your spending in a specific category can be very challenging. 
    For example, if your housing costs are eating up too much of your budget, your only solution may be to move to a smaller or less expensive location. 
  6. Identify specific items that are hard for you to resist and do all you can to avoid them. If there is a certain store or website where you consistently seem to go over your planned spending, find new, less tempting locations to shop.
  7. Get outside advice. If you find that you’re frequently over budget or have difficulty meeting your financial goals seek professional help. Most accountants and financial planners can offer sound advice to help you learn how to plug the holes in your budget and gain control of your finances. You can find lots of free and low-cost advice on budgeting and financial planning online. Many organizations, such as churches and local chambers of commerce, offer free or low-cost credit counseling and financial planning courses to members.

Becoming aware of common budget busters, and selecting a strategy to deal with them, can help you to stick to your budget and increase your savings.

Until the next post,

Best,

Juan

Show Me The Money!

Published on by gamechangerjoLeave a comment

Where is Your Money Going?
At the end of each month, do you find yourself wondering where all your hard-earned money went? Discovering your financial drains will enable your money to work for you. Funding savings, debt repayment, or other things that are important to you instead of just disappearing into nothingness. A little detective work might be necessary, to figure out where your money is going. The best way to get a handle on your finances is to get everything accounted for, then tackle your financial goals.
How can we identify our money drains and improve our financial outlook? Consider the following tips:

  1. Calculate all income. The first thing to do is calculate all sources of income for your household. Put together a chart listing income sources and amounts for the past 30 days. This will give you an idea of how much money is coming into the household, which is the first step to determining, how much is going out.
  2. List your expenses. List all of your regular monthly expenses such as rent or house payments, car payments, credit card and loan payments, gas, food, utilities, cable, internet and others. Try to list exact numbers, or estimate if your expenses vary. This will give you a good idea of what your basic expenses are.
  3. Track every penny. Spend an entire month tracking every cent that you spend. Write down your beginning balance, and every dollar in and every dollar out. This is the key to determining where you’re losing money.
  4. Interpret the results. Compare how much money you’re bringing in, to how much you’re spending every month on bills, and other expenses. Are you spending beyond your means? Are you allocating money for savings, investments, and retirement?
  • If you have money drains, determine what they are. Are you spending $4.00 on an iced latte Monday through Friday? Is your dining out expenses much higher than you expected? Are you eating from vending machines or expensive fast-food joints at lunch, rather than brown-bagging it?
    5. Put this information to good use. Armed with your written guide (below) to your income and expenses, you can control your finances more effectively. Once you have this information laid out in front of you, it will allow you to fine-tune your finances little by little, until you’re putting more money into savings and less into “money drains” from month to month.
  • Determine ways to reduce these money drains. Can you brew coffee at home to save money every week? Can you cook at home to save money on eating out? A few dollars saved every month in different areas of your budget can definitely add up to your benefit.

Once you determine how much money you have coming in and going out, start directing your money toward what’s really important. Trim down your expenses or find ways to increase your income. Do not spend beyond your means. Your financial future will shine much brighter when you prepare for the future you desire. Use this free Budgeting-A-New-You-Workbook to help you get started!

Next week, look out for simple ways to take back more of your time.

Until the next post,

Best,

Juan