No matter what challenges you’ve set for the New Year, financial fitness can be the spinach to your Popeye, the mushroom to your Mario, and the gamma radiation to your Hulk. It can be that final boost you need to achieve greatness in any arena.
Money isn’t everything, but it is important if you want to, you know, buy stuff. Lack of money can limit your lifestyle, and not just how many pairs of leather pants you can afford to buy, but how much time you get to spend doing the things you love to do.
The only thing limiting your leather pants collection should be you, maybe your spouse, and your kids if you’re feeling generous.
1. SET GOALS
Sit down with three-year-old you and ask why, why, why…and why. There’s literally no reason to be an aimless saver.
Be specific and realistic. Don’t say, “I want to save more money this year.” Say, “I want to save $2,000 to start my ant farm business by June.”
Consider how your seemingly non-financial goals are affected by your financial status. If you want to lose weight this year, maybe you’d like to hire a trainer. Chances are your trainer will probably like to be paid with money.
Think short-term and long-term. Do you want to buy a house someday? Do you eventually want to be able to retire? Someday and eventually will be here before you know it and you’ll want to look back and say, “I’m really glad that I started saving back then.”
Check out budgeting tips in, “Overcoming the ‘F’ Word: Finances.”
Taking a long, hard look at your spending habits can be as unpleasantly eye-opening as looking into a magnifying mirror. Grab a beer, flip on some therapeutic tunes, or invite the whole gang over for a group financial catharsis; do whatever it takes.
Look at three months of average spending (go ahead skip December) and break down your spending by category: groceries, restaurants, clothing, debt and interest, gas, utilities, miscellaneous, whatever.
3. CUT IT OUT
A $2 daily coffee on the way to work adds up to a whopping $520/year. Cutting back on a seemingly small expense can pay off in a big way.
Don’t get unnecessarily carried away and go on a strict beans and rice diet if you don’t need to, but do ask yourself with each and every purchase how it is helping you reach your goals, financial and otherwise.
- Big targets are easy targets. Were you surprised at how much money you spent eating at restaurants each month? Small moves like cooking at home one more night each week are easy to make and overtime can make a major impact on your overall savings.
- Get creative. According to the FCC, the average US cable bill amounts to around $64/month. Try trading that expensive cable package for a cheaper service like Hulu, Amazon Prime, or Netflix for about $8/month. That’s $672 in annual savings without even breaking a sweat.
- Know thyself. Set yourself up for success. If you’re bad at tracking your spending with a credit card, switch to a cash-only policy. If the thought of skipping Starbucks makes you not want to get out of bed in the morning, learn how to make your favorite drink at home. Your money saving plan will only be successful if you can live with it and stick to it.
4. ACTIONS SPEAK
Make a budget. Consult with a registered investment advisor (USAA provides them for free) who can help you select the right investments for your goals. Set up automatic deposits directly to your savings account, Thrift Savings Plan or IRA. Cultivate good financial habits.
To have a long-term relationship with financial success, you’re going to have to commit. No more budget-less nights out on the town and no more not checking in if you think you might be a little overspent for the month. Follow through on all of the goals you’ve made and you’ll own your finances in 2015.
About the Author
Lauren is an Air Force wife and a mother of two under two. She writes about personal finance on her blog StayAtHomeEconomics.com and moderates TheUnclassifieds.com a community resource for military families.