Bad Habits That Kill Your Budget

It takes a lot of work to stick to your budget and reach your financial goals.  If you feel like you are just treading water instead of making progress with your finances, it might be time to look at your spending habits.  Here are some habits that will kill your budget that you probably haven’t even thought about.

No Grocery Plan

Everyone shops for groceries differently, and many people go to the store several times a week for smaller shopping trips instead of one big store run.  They feel like since they aren’t spending a lot of money at one time that they are probably saving money. Usually, the more trips you make, the more you spend.  If you make a meal plan and do one big shopping trip for everything on your list (and only items on your list), you will undoubtedly spend less money on groceries as a whole, therefore making your budget easier to stick to.

Eating Out Too Often

As we all know, if you eat out too much, it can be bad for your wallet.  However, many people don’t realize how much they are getting food out. Eating out doesn’t just happen at restaurants, it happens at coffee shops, convenience stores and sometimes even grocery stores.  If you are serious about sticking to your budget, make every single meal or drink you consume at home. Then, plan your meals out according to your budget. You will save more money doing this than you might think.

Reading Retail Newsletters

If you are someone who likes to do most of their shopping online, you are probably no stranger to the lovely email newsletters that companies send out frequently.  Some stores send at least one a day. They are eye catching and almost always have news about a sale or have a coupon attached. Before you know it, you are on their website clicking away and filling your cart so you can take advantage of the coupon or sales.  It’s a bad habit that can easily derail your budgeting efforts. To combat this problem, simply don’t read the newsletters. Either delete them before reading or unsubscribe from them entirely. If online shopping is your kryptonite, you don’t need to be tempted by reading about their products everyday in your inbox.

Spending More to Get Free Shipping

Speaking of online shopping, do you ever fall into the “free shipping trap?”  You know the one where you only want a $12 item, but shipping is $5 unless you spend $35, so to save the shipping cost of $5, you spend an extra $23.  That kind of math doesn’t really add up. It’s better to spend the $5 in shipping than to spend extra money on something you really don’t want just to reach the minimum.  Don’t fall into this trap–instead stop and think about what you are purchasing and whether or not just paying the shipping cost will benefit you more in the long run.

There are many spending habits that we get into when we aren’t paying attention.  It’s good to be mindful of all of our purchasing habits. If you find yourself falling into any of these bad ones, try to renew your thinking and change your spending ways.  Your wallet will thank you.

4 Budget Tips Every Young Couple Should Know

When you are young, learning how to make a budget work for you can take some time.  When the time comes to get married, trying to mesh your budgeting style with another person’s style can be daunting.  Plus, as a couple, you have to think about budget categories that you might not normally have as a single person. It’s definitely a time of learning.  If you are in this situation currently, or you see yourself being there in the near future, here are some tips you should know about budgeting as a young couple.

Plan for Life Events

Even if buying a house, having kids, or finishing your Master’s Degree isn’t on the calendar for the immediate future, if there are big life events that you eventually want to get around to, you need to start planning for them now.  Most life changes are not cheap, and the more you save, the better prepared you can be when you are ready to embark on those journeys. Put a budget category for specific future life events, and put a little money back each month for them.  Even if you don’t save a ton, you will be far ahead of where you started.

Budget Together

A lot of arguments in marriage stem from financial issues.  To help stay on the same page and reduce these arguments, don’t assign the finances to one partner or the other–do it together!  When you are both on board with your financial plan, it is easier to stick to that plan. You can’t feign ignorance when you go off budget if you have monthly budget meetings.  Plan out each budget category so that it fits both of your needs, stick with it, and don’t be afraid to change things if you outgrow certain categories or methods.

Make Room for Fun

When most people think of budgeting, they think of strict rules and no fun.  That simply isn’t true. Sure, budgeting does come with some guidelines and rules, but you can build the fun right into those parameters.  

First, have a “fun money” category.  Agree upon a set amount of money for each person to just do whatever they want.  Coffee, movies, books, shopping–whatever they want to spend that money on gets a free pass.  When you have a little fun money, it makes it easier to stick to your budget as a whole because you feel as if you can still be whimsical and slightly impulsive.  Just stick within the fun money budget, and you can spend that money guilt-free.

Secondly, make budget items for vacations or special events.  Having a special concert, vacation or weekend activity on the calendar will give you something to look forward to while you are sticking so close to your budget in every other area.  

Don’t Stress–Keep Going

Learn how to move on if you mess up.  There will be days, weeks, or months where your budget and spending does not go as planned.  That’s ok. Learn from your mistakes, adjust your budget, and try again. As time goes on, you will get better at budgeting and mistakes will happen less often.

Budgeting can be harder when you are doing it with another person, but if you include each other in the process, make a reasonable plan you both can stick to, and leave some room for fun, you will be winning with your finances in no time!

Beat The Heat: Energy Conservation Tips to Help Save Money on Electricity

Electricity is vital in today’s society, but it definitely doesn’t come for free.  As we enter into the later part of summer, it’s very common to see our electric bills go up, up, up.  So how do you stay cool this summer and still keep your costs down? It’s all about conserving energy.  Here are a few tips to save energy and money during the dog days of summer.

Hands Off

Running your air conditioning unit is probably the source of most of your electric bill woes.  Summers in the south are no joke, and your A/C unit has to work overtime to compensate for the stifling heat outside.  If you have family members who like varying degrees of coolness, it’s best to come to an agreement on what number you want to set your thermostat at and leave it there.  The more you turn your thermostat up and down, the more electricity your unit uses to accommodate your requests. If you leave it at one temperature consistently, you are reducing the amount of energy it takes to run your A/C, which will lead to lower amounts on your bill at the end of the month.

Close The Curtains

As nice as it is to let the natural sunlight in your home, if you are trying to reduce cooling costs, it is in your best interest to keep your curtains closed during the hot days of summer.  The sun will naturally cause your home to rise in temperature, making your A/C kick on when it might not normally. If you keep your curtains closed, your home will remain cooler and your A/C can get a little break–giving your wallet a break in the meantime.

Turn off the Lights

Another easy way to save a little money on your electric bill is to simply turn off all of the lights in your home that you are not using.  If you know you are leaving a room and won’t be back for at least 15 minutes, just turn off the light. Not only do you save energy from not using the lightbulbs as much, but darker rooms are also a bit cooler than rooms with lots of light.  Kill two birds with one stone and just keep unnecessary lights off to save energy and keep cool.

Be Cool in the Kitchen

During the summer months, try to keep cooking with your oven to a minimum to save money.  It should come as no surprise that when your oven is heated, it will leak heat out into the rest of your house.  The more you use your oven on really hot days, the more your A/C has to work overtime to keep you cool. And as we all know, this results in higher costs on your monthly electric bill.  So make summer meals that will keep not only you cool, but your home cool as well, and leave the oven for the cooler months.

All of these tips are really just basic, simple ways to reduce your energy consumption over the hotter months.  None of these on their own will make ridiculous dents in your electric bill, but done together and consistently, you will see changes in the amounts you are charged.  Every little bit of energy conservation adds up over time, and you will reap the benefits if you stick to these habits.

Four Ways College Students Can Be Smart With Money

It’s almost time for colleges and universities to begin classes again!  If you are a college student, you probably have a limited budget as you study for your future profession.  Money can be tight, so that it why it is extremely important that you learn the basics of personal finance so you can be money savvy while you are on your own.  Here are a few ways you can be smart with money while you are studying in school.

Buy It Used

Most people like to buy everything they own new, but there are many things that are just as good when you buy them used.  For college students, a big example of this is textbooks. Instead of buying all of your textbooks new, try to buy them used.  Most of the time, they look like you bought them new anyway for half the price. When you are done at the end of the semester, sell them back to make a little money.

Other items that can be great when bought used are clothing and items for your dorm room/apartment.  Thrift stores have come back “on trend” recently with people finding some really unique and fun items to outfit themselves and their homes.  It can also be fun and somewhat like a treasure hunt to go to different thrift stores to look for items.

Find Cheap Entertainment

We all know that college isn’t all books and studying.  You have to have fun too! If you are tight on a budget, find ways to spend less on entertainment.  Many cities have free community events you can partake in like movies in the park, free concerts and other events.  If staying in is more your speed, instead of buying cable, keep it simple with an antenna and a good cheap streaming service like Netflix or Hulu.  For music, use the free versions of Pandora or Spotify, or check out their reduced student rates for their premium versions. Also, don’t forget about the campus amenities your school might offer.  From the library to the fitness center, you are sure to find something to entertain you.

Save Money on Food

Food can get expensive, so if you are looking to save money it is best to set a grocery budget and stick to it.  To get the most out of your budget, shop the sale papers from your local grocery store, and stick to the discounted items.  If you have a meal plan at your school, take full advantage of what you are paying for and use it. Eating out at restaurants can get expensive pretty fast, so it’s best to limit it to special occasions.  

Easy Transportation

If you live on campus at your school, consider walking or riding a bike to get to where you need to go so you can save money on gas and car usage.  If you live in a city, check the prices of a public transportation pass to see if it would be cheaper than owning or operating a car. If you do have a car, try carpooling with a friend to split the costs of transportation.

As you can see, there are simple ways to reduce costs in your everyday life, especially if you attend a college.  Great personal finance habits start while you are young, so be sure to practice them before you get out into the real world.  Future you will be grateful.

 

How a Cash Envelope System Can Help You

If you have been around the budgeting scene long, you probably have heard of the “cash envelope system”.  Proudly touted by Dave Ramsey, the cash envelope system was introduced to help you quit overspending and pay cash for everything.  It’s designed to keep you out of debt. Most people have a better chance of sticking to their budget if they can visually see exactly how much money they are working with.  So how do you set up and use your cash envelopes? Keep on reading to find out.

Budget Beginnings

To create a cash envelope system, you must start with a budget.  If you don’t have a budget, the plan simply will not work. You have to know how much money you have coming in and going out.  Write down any category in which you think you might spend money on during the month, and add it up. The total should be less than or equal to your monthly income.  This will help you see which categories need to become envelopes.

Categorizing Your Cash

After your budget is established, it’s time to figure out how to categorize your envelopes.  Most people have envelopes in the areas they tend to overspend like groceries, entertainment, eating out, car repairs, “fun” money, clothes, household items, etc.  You decide on how much money you want to put in each envelope per month, and divide that number by the number of paydays you have. So say you want to put $500 a month in your grocery budget.  If you get paid bi-weekly, you would put $250 in that envelope each payday. When you have all of your envelopes categorized and fully stocked, you will be holding all of your spending money for the month in your hands.

Tracking Time

It’s always a good idea to track your purchases within each envelope category.  So, for our grocery example, every time you use money out of the grocery envelope, you would write down on the envelope the date and how much you took out.  If you add money into the envelope, you write that down too. This will help you know if you ever need to increase the amount that goes into the envelope or even reduce it to fit your needs.  Once the money is gone out of the envelope, it is gone. There is no more money to spend in that category–so spend it wisely! If you have any money left over in a certain category for the month, roll it over into the next month and you will have extra to spend if you need it.  

Using cash envelopes is really easy once you get the hang of it.  Sure it may feel weird the first few times to pull out a wad of cash to pay for something instead of swiping a card, but the benefits of paying cash for everything far outweigh any awkwardness you may feel.  So give cash envelopes a try–you may find that it works for you.