If you’re like most of us, you probably spend more than you have to. A new handbag. Another night out. A weekend getaway. Let’s face it, we all spend on things we can do without – without really lowering our quality of life.
In fact, having the bills paid, and a few bucks in the bank, may actually improve your quality of life. Once that expensive cruise is over, all you have is memories. Bank the cost of that cruise and you have the start on a nice contingency fund – emergency cash available when you need it.
The key is to identify budget busters and avoid them, work around them, or simply ignore them. Money in the bank delivers more than security. It can deliver more options for the future – from buying your own home to enjoying a truly secure retirement.
Take this short quiz to get you started on managing your personal economy today, tomorrow, and way down the line.
1. Are you still writing checks? Still writing paper checks to pay the electric bill? Running to the bank to pay that credit card bill on time?
Using outdated technology takes time, and may lead to missed payments, lost statements, or late fees. Mailing paper checks may also put you at risk, since thieves sometimes steal checks from mailboxes and alter them to pay themselves.
Even small banks offer free, electronic payment services. You can also access your accounts online to move money around and receive notifications of suspicious activity.1
You set the schedule, you determine the amount, you provide authorization, and your bank does the rest. When you eliminate the chore of hand-writing monthly checks, you’re less likely to miss payments and incur late fees, and you’re in control of your finances, not the other way around.
2. Do you spend without thinking? Eliminating impulse buying can save you lots of money. The checkout aisle at the grocery store is stocked with impulse items: a pack of gum, the tabloids you read while waiting, a candy bar. On impulse, many just toss it in the cart. You don’t even think about the $1 that purchase costs you because it’s too little to worry about.
How about that $4 latte? Too little to worry about? Before you make any purchase, think about the money the item cost – not just the item. Sure, the latte is tasty, but $4 worth of tasty? Probably not.
With expensive items – furniture, a new car, new appliances – give yourself a 24-hour cooling off period to lower impulse buying.
3. Are you in the fast lane? Drive fast, use more gas. Drive slower, use less gas. And with the cost of gas, you can save a lot simply by leaving a few minutes earlier and driving a little slower. Over the course of a year, you just might save enough to finance that emergency fund – and take better care of your car so it lasts longer.
Small things, like driving slower, add up to big savings over time.
4. Do you ever shop to feel better? Bad day at the office? Maybe a new tie would make you feel better, or a nice dinner out. Buying to make yourself feel better when you’ve had a bad day (or week), aka “retail therapy,” can be a budget buster.
Feeling a little blue? Take a quick walk around the block. Chances are, you’ll feel better, and you’ll save some cash.
5. Do you make minimum payments on your credit cards? This just adds to your monthly interest costs without improving your personal finances. Try to pay more than the minimum required by the credit card issuer.
Lower your credit card balance each month, and keep credit card charges to a minimum to keep credit spending under control.
6. Do you pay for things you can do yourself? It can cost $10 to get your car washed. It can cost $100 a week to get the cleaning crew in. Window washers may charge up to $40 a window!
There are lots of things you should call an expert for. Need a leaky shower repaired or a water pump replaced on the car? It’s probably best to pay someone who’ll do it right the first time.
However, there are lots of things you pay others to do that you could do yourself. Wash your own car. Run the vacuum weekly. Clean your own swimming pool.
If it’s something you can do safely, and save money at the same time, do it yourself and trim those extra expenses – the ones that add up each month.
7. Do you throw away groceries? Americans throw out a lot of food – food that costs money. Check the expiration dates on the foods in your fridge or on your shelves and make sure to use them while they’re still good.2
Don’t buy the huge bags of food offered by food clubs and some supermarkets unless your family is likely to eat it all quickly. Buying in quantity may save on the per-unit cost, but it’s no bargain if you toss half that bushel of apples in the trash. Buy what you need, and cook it before it looks like a science experiment growing in your vegetable drawer.
Eliminating budget busters isn’t hard. It just takes more awareness of your spending – where the money goes, and why – along with enough discipline to stick to your budget when faced with temptation.
- For information about online banking and bill pay from Nevada State Bank, visit www.nsbank.com/online.
- For more information on food labelling, see our Two Cents blog: https://blog.nsbank.com/reading-and-understanding-food-labels/
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.
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