- Start a budget! Lay out your expenses. Where is your money going every month? Are there any categories you can cut? Do you really need to eat out every.single.day? Are there free or inexpensive hobbies you can use to replace expensive ones?? Are you running in the red (not enough income every month)? Or are you good (money left over)?
- Follow a budget! Do you already have a budget? Are you following it each month? If you don’t have a budget, see step one. If you’re not following it each month, start now. And make adjustments so it actually works!
- Start an automatic savings plan! You can do this many ways, but really, each month or better yet, each paycheck, take a set amount (say 10%) and automatically put it into a savings account. Open a free savings account separate and apart from your day-to-day checking account so you can’t see it. Tell your HR department to automatically deposit 10% of your check into the savings account each pay period. Even $5 can add up (if you get paid twice per month that’s an extra $120 at the end of the year – better than nothing)!
- Sit on big purchases! Eyeing that $350 purse? Or how about a new $400 Apple Watch? Sit on it for awhile. Ask yourself what else you can purchase with that money? Are you running in the red every month (not enough income to cover expenses)? Were you going to put it on a credit card? No way! Don’t even think about it until you can operate your finances (with a sizable savings account) in the green each and every month. You can tell time with the iPhone you already have. And that purse? Use what you’ve got or check out Target for fashionable accessories at a quarter of the cost. Ten years from now, neither of those things will matter. Your personal finances will thank you!
- Plan ahead! Taking a trip at the end of the year? Need groceries? Instead of waiting until the week before the trip to start budgeting and putting money aside for the trip, start looking at airfare and pricing NOW! Put aside money (don’t forget to add it to your budget) for the trip NOW! Don’t wait until the last minute. Need groceries? Don’t go every night after work. Plan your meals in advance and go once per week. This will save you from those impulse purchases you make while you’re starving! And might save you some time too!