As 2024 approaches, many of us are thinking about New Year’s resolutions; and we all know that in mid January, many of those resolutions will have fallen by the wayside. It’s human nature to set goals and then stumble a bit. Setting sound financial goals is something we should do every month, and we also need to increase our potential for success by adopting some disciplined habits. Here are some ideas for you to try. Just remember, good habits take some time to develop and bad habits take some time to break, so be patient and don’t give up!
Pay Yourself First
This is the most helpful habit of all, and although it may seem difficult at first, it really pays off. Put at least 10% of your monthly income into a savings account and then forget about it. Be consistent. When tough times hit, you’ll have a rainy day fund to help you out. In the meantime, the account will grow, sometimes slowly, depending on the current interest rates. Work with your bank, of course, to get the best interest rate you can.
Track Your Habits for One Month
Most of us have had the scary experience of running out of funds, especially towards the end of the month. It’s so easy to spend money without really knowing where it goes. It may sound simple, but tracking your spending on a daily basis for one month can be really helpful. Try categorizing spending into the following groups: housing, utilities, insurance, medical expenses, childcare, groceries, dining out, gas and transportation, clothes, household items, entertainment, etc. Write down what you spend every day, and at the end of the month, take a long, critical look at your habits to see where you might save. Use a highlighter to mark the items that are absolutely necessary, and prioritize these for the following month.
Ditch the Credit Cards for a While
While you are tracking your expenses for a month, consider ditching that credit card. Allow yourself a specific amount of cash to spend each week, and take note of how well you do. You may be surprised at how this habit will change your thinking. Credit card interest fees are extremely high, and if you consistently accumulate credit card debt, it can be very tough to get control of it.
Practice Patience: Postpone
When you are considering a purchase, ask yourself if you can wait just one more month. Your shoes are a little worn, but can you wait one more month to replace them? Do you need that haircut now, or can you let it grow out a little more? (Speaking of haircuts, many beauty schools offer reduced prices so their trainees can get some hands-on practice). What about your tires? Can you wait until next month to replace them? No! Bald tires are a safety hazard, so this will have to be a priority. Hopefully there are funds for this in your rainy day account!
Avoid Impulse Purchases
Plan ahead and take a list when you shop. Train yourself to say “no” to sudden impulses. Make like a hunter-gatherer, and hone in only on the items on your list. Then, make a quick exit! Our brains are wired to sense pleasure when we acquire something new, but this pleasure is very temporary, and pales in comparison to the comfort of being financially stable.
Grocery Store Secret Weapons
When shopping for groceries, plan your meals ahead of time, stick to your list, look for specials, use coupons, and locate the markdown section. Day-old bread is just as good as fresh! However, don’t purchase items just because they are marked down. It’s only a good deal if you are buying something you need. Buy in bulk if the item is one you use often, but don’t stock up on items you are not likely to consume for a while. Be aware that generic items are less pricey than brand names, and often have exactly the same ingredients. Go healthy: water is better than soda; a bag of fresh fruit (in season) is much less expensive than a dozen donuts; and a load of veggies has more nutrition than frozen, processed meals. Keep in mind that pre-cut fruit or packaged salads are healthy, yes, but way more expensive than unprocessed versions.
Utilities
The costs of electricity, water, garbage pick up, and phone service add up! Conserve electricity by turning off lights and unplugging devices when you are not using them. Use gray water to irrigate your garden (and absolutely plant a veggie garden even if you do so in little pots! With very little space, you can easily produce herbs and salad greens year round for the cost of a few seeds). Once a year, call all your utility companies to see if you can renegotiate your rates.
Use Your Community Resources
Don’t be shy about using the resources in your community that are designed to support you. Food banks, pay-as-you-can farm stands, free libraries, low-cost medical clinics and soup kitchens are available in many neighborhoods. If you have school-aged children, be sure to find out which services your schools offer. Many have free pantries designed to provide food, clothing and hygiene items to families. Religious organizations often offer assistance also. There should be no shame in accepting help – but remember to pay it forward someday when you are able to.
Good Habits May Take a Little Effort
Sometimes, adopting new habits takes a little work, but it is well worth it. Here are some additional ideas.
Automate deposits and bills so that each month a certain amount is deposited into your savings account and the important bills get paid on time. You will always want to avoid late fees!
Once a year, make time to review your subscriptions and cancel those you no longer use (do you really need all those streaming services!).
Try to repair items instead of replacing them. A shoe repair service can replace broken heels at a fraction of the cost of new shoes.
Pack your lunch! It’s healthier than eating out or ordering take out – and cheaper! Cooking at home will save you tons of money, and when you invite friends over for a potluck and games night, you’ll also have a great time.
Pack your own coffee, too. Many people spend $30 – $50 a week on take out coffee!
Check out the thrift store. It’s great for the planet when we purchase used items, not to mention great for your wallet, and you’ll discover some pretty amazing deals.
Public libraries don’t just lend books! You can also find music, movies, newspapers and magazines, and many libraries offer free entertainment and classes. If you see a class on financial planning, sign up!