If you're shaping up your finances - whether it's to buy that dream vacation, a new home or to pay off debt- you need to stick to a plan. Start with the basic 50-30-20 rule of budgeting that will help you create a balance between your obligations, goals and splurges. You put 50 percent of your income toward necessities like housing and bills and 20 percent toward financial goals like paying off debt or saving for retirement. The final 30 percent goes for wants like dining or entertainment. Or, if funds are limited, try allotting 20 percent to financial goals and 80 percent to everything else. You can adjust the equation to your situation. Follow these basic rules, and start making changes to trim your expenses with the goal of becoming financially fit!
Do a half hour of "financial review" each week. Looking at your account balances and reviewing weekly spending will help keep your budget on track.
Don't spend more than you earn. In fact, spending less than you earn is a basic way to save and help your money grow.
Pay yourself first on payday, even before you pay your bills! See if your bank has automatic recurring transfers from your paycheck to your savings.
Use cash whenever possible. Using credit cards, especially those with high interest rates, means you're spending your future money and it will take you twice as long to pay it back.
Consider putting up visual reminders of what you're saying for. It's not exactly a rule, but having to look at that gorgeous beach getaway, hiking trails or a new house from a picture in your wallet may help keep you from mindless spending. Seeing it may force you to look at the trade-offs and ask yourself, "Do I really need that pair of earrings now or should I save my trip?"
Start cutting expenses little by little
There are dozens of ways to trim your expenses and start growing your savings. Once you get in the mindset of taking care of your money, saving and being thrifty becomes a way of life that pays real dividends! Try these tips:
Pack your lunch - Bringing your lunch to work each day doesn't have to be boring. By planning ahead and prepping on the weekends, you can create delicious, healthy meals and save yourself hundreds of dollars over the course of a year. Consider bringing your own coffee and snacks with you as well to save even more.
Cut the cord - With more and more alternative options to watch your favorite shows and movies, you may be able to cut or downgrade your cable plan to save additional money. Also take a hard look at your phone bill to see if you can make any changes or switch providers to reduce your monthly charges.
Clean house - Another benefit of minimizing and cleaning out your home is finding things that may be of value to others, even if you no longer need them. Host a garage or yard sale, try selling items online or take clothing to a vintage store. Put any money you make right into savings.
Round up - At the end of the day, put any spare change from your wallet, purse or pocket into a jar. Also, check if your bank offers a program or app that rounds up your purchases and invests the difference in a savings account. For example, if you buy a shirt for $22.50, it will automatically place $.50 in a savings account for a total transaction of $23.
Buy in bulk - It may seem counterintuitive, but buying more can mean spending less. Instead of buying two rolls of paper towels each month, look at the cost per roll of buying 10 rolls at a time. This only works if you have the space to store the extra items, and make sure to look carefully at the unit price to confirm you are saving money.
Try generic - When buying crackers or dish detergent in bulk, take a look at its store-brand counterpart. Oftentimes, the ingredients list is the same, but the price is much lower. This can save you quite a bit over time, and you likely won't notice a difference.
Leave the car at home - This may not work for everyone depending on where you live or what your schedule is, but walking to your destination or taking public transit can save you money on parking and gas (and you're less likely to buy a lot if you have to carry it home!). Plus it's better to your health and the environment. If you must use a car, consider carpooling if possible.
Try new plans with friends - Instead of going out for an expensive dinner or concert, host friends for a potluck dinner or check out free or low-cost events happening in your town. Many communities host concerts, festivals, free museum days and more.
Visit the library - Speaking of great community resources, check out your local library! In addition to books, many libraries offer movies, passes for local attractions and even e-books, all at no cost.
Work out at home - As the weather gets nicer, it might be a good time to put your pricey gym membership on hold and work out outside instead. Go for a run or walk or take your bike for a spin. You can supplement by working out at home with free workouts online or via an app.
Stick to coupons for the things you already buy - Coupons that offer discounts can lure you into buying merchandise you may not actually need or use. On the other hand, coupons make sense when you're making an expensive but necessary purchase that you don't regularly have to make, such as car repair you absolutely can't fix yourself, and you're able to find a special coupon or discount for it.
Stick to once-a-week grocery shopping. And take a list! Shopping more often to pick up a few items can prompt you to pick up extra things not on your list and throw you off track from buying only what fits your habits.
Shop consignment or thrift for clothes and accessories. If there aren't any near you, you can find plenty of websites that sell gently used, good quality clothes, as well as let you sell your own
Reevaluate commercial cleaning and laundry products. These products are among the many items that may not always be necessary to purchase. For example, you can find recipes to easily make cleaning solutions using vinegar, baking soda and other cheap household ingredients. You might also consider trading laundry sheets for reusable dryer balls.
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