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How to Save Money

Confession time – I’m a natural spender. I always knew that I should save money, but I never knew how to save money. My idea of saving money was getting something on sale. Sure I spent $25 that I probably didn’t need to, but I “saved” $75!!

 

In order to get our finances in order and get our debt paid off, I had to go from being a spender to learning how to save money. This transition is not always easy, but here are 5 simple things that you can do to start saving money.

1. Save Your Raise:

Any extra money that you receive that you’re not used to living on, save it before you spend it. This can include any bonus or overtime pay, raises, and tax refunds. Before it disappears and you have no idea what happened to it, put those extra dollars into a high-interest savings account.

 

2. Save Your Spare Change:

Every day or at the end of the week, empty your pockets or coin pouch into a jar and watch the savings grow. Since we use cash for most of our daily purchases, our change adds up quickly. In 2016 we accumulated $160 in loose change which was used to purchase the gifts for our two daughter’s Christmas stockings. Not a bad way to use those coins that would normally weigh down your wallet.

 

3. 52-Week Challenge:

If you’ve spent even a minute on Pinterest, than you’ve probably seen this savings trick. The idea is that every week you save a predetermined amount of money. You start by setting aside $1 on week one, $2 on week two, so that by the time you get to the last week, you’re saving $52. Follow this and when the year is up, you will have saved $1,378.00. There are many savings challenges out there depending on what your goal amount is, and the reason why they work is because the savings goal for each week is a manageable amount therefore making it easier to stick with.

 

4. Pay Yourself First:

Another way to save money automatically is to pay yourself first. If you have your paycheck directly deposited, talk to your Human Resources department and see if they are able to split the deposit so that you have money deposited into your savings account with each pay. You can determine how much you would like sent into your savings. It could be $25, $50, or even 10% of your earnings. Since it’s being put into your savings account right away, you’ll be sure to save it before you can spend it.

 

5. Have a Spending Plan (aka The Budget):

This is the biggest money saver of them all. Set up a monthly budget where you list your monthly income that is expected and deduct the various expenses that will need to come out. From the remaining amount you can determine how much you would like to set aside into savings.

No matter what method or methods you use to save money, the trick is to make sure that you are consistent and stick with it. Happy Saving!!

 

Your Turn!

  • What do you do to make sure that you are saving money each month?

10 Ways to Cut Your Spending

No matter where you are financially, everyone loves looking for small ways to cut their spending and save some money. Those smallest of savings can really add up. If you can cut just $6 from your daily spending, that adds up to $2190 a year!! I don’t know about you, but I can put that amount of money to some good use.

Let’s look at 10 simple ways that you can cut your spending so you can free up that extra cash for the things that are really important to you.

1. Switch to Store Brands

Did you know that making the switch to store brand labels can save you on average 25%? There are big savings to be had by making this simple change to the way that you shop. Worried about sacrificing quality? Over the counter medications and many staple food items are regulated by the Food and Drug Administration, so the store brand pain reliever will offer you the same benefits as the national brand. The only thing you’re not paying for are the marketing and the pretty packaging.

2. Shop with a List

Shopping with a list, and sticking to it, is an easy way to cut spending because it helps you to avoid those impulse purchases. This doesn’t just go for groceries. Next time you’re headed to the store to get the children or yourself some new clothes, be sure to inventory what you have and write a list of what you need. This will help you stay focused while shopping and save you money.

3. Meal Plan

Meal planning has been the biggest single thing I’ve done that has saved my family money. It has allowed me to cut, on average $200 a month from my grocery budget! Once a week, sit down with the store ads, see what’s on sale, and plan a week’s worth of dinners. Not only will this help to simplify your week, but it will also help you to avoid those trips through the drive-thru.

4. Carry Snacks

Speaking of trips through the drive-thru, one of my favorite ways to avoid spending money on food while we’re out and about is to carry snacks with me if we’re going to be away from home for more than a couple of hours. My stash of “car snacks” has saved many trips to the convenience store or fast food restaurant because all of a sudden one (or both) of my children are hungry.

5. Use it Up

Before you head out to buy another bottle of shampoo or another bottle of salad dressing, use up what you already have first. If you want to make sure that you are truly using it all up, be sure to cut open the end of that tube of toothpaste because even if you think it’s all gone, you will find that you have another week worth of product left in the package.

6. Talk to Your Service Providers

Call up your service providers to see if they have any promotions or special pricing that you can take advantage of. If you mention that you’re looking at shopping around, they’ll be more than happy to give you their best offer so that they can keep your business.

7. Pack your Lunch and Bring Your Coffee To Go

If you are the type of person who grabs lunch and coffee on the go, this simple change could save you $50 a week or more. It might take a few extra minutes in the evening to put together your lunch, but the savings are more than worth it. If you took that $50 a week and invested it in a fund with an average return of 6.5%, in 15 years you would have just over $61,000!!

8. Cancel Email Deals and Sales Alerts

I started doing this after Christmas and I’ve come to appreciate my less cluttered in-box. The biggest thing I don’t miss? That feeling of temptation when seeing “75% OFF!!” and “Brand New Markdowns!!”.  After all, you’re not really saving any money if you didn’t need the item in the first place.

9. Buy Things Used

Thanks to online buy and sell sites, good old thrift stores, and garage sales, it is easier than ever to buy quality items used. I’ll buy used clothing for myself and my children, books, and some furniture pieces for my home. No longer will I spend $80 for a pair of jeans when I can get the exact same pair for $15 at my local thrift shop.

10. Practice the Art of Contentment

I love this quote because it really puts into perspective just how fortunate most of us are. Rather than craving the next new item or upgrade, focus on being thankful for and appreciate what you do have.  When you spend your time appreciating what you have, you’ll find you will spend less time focused on the things that you want.  

Your Turn:

  • What are some spending cuts that you have made to reach your financial goals?

 

How To Get Out Of Debt

What would your life be like if you didn’t have any debt payments? How would your financial picture change if you weren’t tied to those payments month in, month out? Let’s break the cycle and finally get out of debt.

Three years ago, my family had close to $60,000 worth of consumer and student loan debt. I had been in debt since I got my first credit card at 19 years of age and after spending close to 20 years in the debt trap, never thought we could climb out of it.

After feeling fed up and tired of juggling nine different debt payments on top of the rest of our monthly bills, I knew we had to make a change. Using these 5 steps, along with focus and determination, we were able to pay off our consumer debt in 25 months. Here’s how we got out of debt, and you can too.

5 Steps to Debt Freedom

 

1. Stop Using Debt:

Seems obvious right? If you want to pay off your debt, you have to stop using debt. It’s time to cut up the credit cards or at the very least put them on ice (literally). In order to get out of debt you have to commit to using cash for your purchases from here on out. This means being patient, saving up, and planning your future purchases. If you’ve been relying on debt, this will be the hardest step, but this is the first step in finally freeing yourself from the mountain of bills.

2. Establish your Emergency Fund:

Inemergency fund order to have a bit of a financial cushion between you and life, and cut ties with the credit card or line of credit, you’ll want to make sure you have a starter emergency fund. For most of us $1000 set aside in a separate savings account will cover most emergencies that arise while getting out of debt. You must commit though to keeping this money in case of emergency only (and no, that pair of boots that you’ve had your eye on and have just gone on sale for 75% off are NOT an emergency).

3. Get on a Budget and Stick With It:

If you want to get out of debt, changes in how you behave with and manage your money are key. The biggest change you can make that will see the debt gone once and for all is to get on a written monthly budget and stick with it. If you’re new to the budgeting process, this article will help you get started.

4. Organize Your Debts:

Time to take out those debt statements and organize them in the order that you’re going to pay them off. There are two ways to organize your debt. Both work because they force you to focus your attention on one debt at a time, and the power of focus is key. 

Snowball: Organize your debts from the smallest to largest, regardless of interest rate. Pay the minimum payments on all of the debts, except the smallest, and throw every extra penny you can at that debt. Once the smallest one is paid off, you take what you had been putting towards it, plus the minimum payment, and start attacking the second smallest debt. By the end, you’re putting a significant amount of money towards your largest debt, making that disappear faster than you could have thought possible.

Avalanche: A second way you could organize your debts is by using the debt avalanche. In this method you are lining up your debts from the largest interest rate to the smallest interest rate. Like the snowball, you’ll keep making minimum payments on the other debts while you pay off the debt with the largest interest rate first and then keep working your way down the line.

5. Throw Every Extra Dollar at Debt:

In order to get that debt paid off as quickly as possible, you want to make sure that you are throwing every extra penny you can at the debt. This means revisiting the budget and seeing what can be trimmed in the short term so you can free up money to add to your debt payment. It may also mean making some extra income.

Getting out of debt requires making some short-term sacrifices, but they payoff is well worth it. Your paychecks become yours again so that you can save for retirement, help pay for your children’s education, and save up for that vacation you’ve always wanted to go on.

Once you start living a debt-free life, I promise you’ll never go back to using credit again.

You Turn:

  • What are you willing to cut from your budget to pay off debt?
  • What would you do with your income if you didn’t have debt payments?
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