1. Set Up and STICK To Your Budget
If you don’t know where your money is going each month, then it will be impossible to set financial goals, pay off debt, or know when you are overspending. I absolutely love having a budget because of the FREEDOM it gives me! If I buy a gift for someone, or a new pair of jeans for myself, I don’t feel guilty because I know those purchases are allowable and I’m not breaking the bank.
For our personal budget, we have a basic excel spread sheet, and I manually type in receipts into each category and keep track of what we have spent. You can try free budget apps like Fudget or Mint:Personal Finance & Money to help you get started. It’s not as time consuming as it sounds, and it brings so much peace to your household when you know where and how every penny you earn is being spent.
2. Complete this 20 Day Budget Challenge
(Wait, didn’t she just mention the 20 day budget challenge??) Yes I did! And I’m going to mention it again because for the next month, you can read nuggets of financial wisdom each day in your inbox, to inspire you to get your finances in order. I will be sharing about topics such as breaking bad spending habits, learning how to save on entertainment, planning your emergency fund, using coupons, and 16 more days worth of some great budgeting tips to take control of your finances!
3. Being Mindful of the Pros and Cons of “Retail Therapy”
Let’s face it – going out and bringing home a new item you’ve had your eye on is a good feeling. Many of us who are avid couponers and deal hunters get a nice “coupon/deal high” when we score something with amazing savings compared to the retail price. This is fun and even therapeutic! It can also be very helpful for your personal finances when you can bring home necessities for a fraction of the usual cost.
The con comes in when you just buy and buy and buy, just because it was a great deal, but the item serves no real purpose. We can sometimes use the excuse of “stockpiling” when really it is “dust collecting.” Don’t bring home a great deal for the sake of a great deal just to get that money saving “high.” Plus if you are currently on a plan to pay down debt, then retail therapy is not your friend. It’s temptation causing you to purchase something you probably don’t really need, in turn for a feeling of gratification that is not long lasting. In the end, you could just be putting yourself in deeper debt. (similar to being on a diet – and consuming dessert when you know you shouldn’t.)
So if you are in need of some retail therapy then ask yourself 2 questions – Is there money in the budget to pay for this and what is the purpose of this item? If I’m dying to get out of the house alone and go shopping, and I know that I personally don’t need anything, then I’ll purchase gifts (even for Christmas) all year long. That way if I find a good deal, and don’t need it (which is probably most of the time), then perhaps I can purchase an item as a gift I needed to purchase anyway. I actually use a gift buying spread sheet that you can find in this post on how Planning Ahead Can Save Big. That way if I want to use shopping as entertainment, and want that money saving / good deal “high”, then I make sure it is for something I need to buy. It’s nice because then your deals are for giving – and giving is a great feeling.
If you want to earn some Amazon gift cards that you can use for guilt free Retail Therapy – you should totally check out Dealspotr! I earned over $50 in Amazon gift cards that I used for Christmas! It is a community of deal hunters – and when you post deals you find, you earn points. Cash in your points for Amazon gift cards!
4. Giving Should be a Regular Line Item in your Budget!
Speaking of giving, you should pick a local church, charity, or organization that you regularly support. What you sow is what you reap! I had a friend recently who got an amazing deal on a pair of designer boots that she scored at Macy’s. Then her and her daughter went to visit some homeless people around the holidays, and inevitably, gave her boots away. She also bought another person some dinner. Two days later she ended up getting a bonus at work that was the same amount she gave away that previous weekend. Out of the goodness of her heart, what she gave, came back to her.
Personally, I regularly sponsor a child through Hope Beyond Today. The missionary family that runs this organization are good friends of mine, and I traveled to India myself and visited the schools they support. This organization is near and dear to my heart, so if you are looking for a place that helps kids in need – here is one I highly recommend!
Not only is giving a good feeling, there is that awesome tax deduction on charitable giving. Even if giving doesn’t make you feel good emotionally (which I guarantee it will), you also get a tax break!
5. Go on a Spending Freeze
Think of this as a short term money diet. Maybe your New Year’s resolution can be for 30 days to not spend money on any extras except your bare necessities and bills. Even limit your groceries – make a menu based off of what you already have on hand in your freezer and pantry. Make a game out of it – see how many meals you can squeeze out without having to go to the grocery store except for produce and milk. Then any money you save, apply that to debt or put it toward a big ticket item you want to save for. You’ll start off the year already being ahead of the game!