As prices go up, it becomes harder to stay above water…but we must!
My fellow Americans — many of us are suffering from an unhealthy economy and high unemployment in this country and find it virtually impossible to get ahead. Working to pay bills seems to be what we are really living for. We are drowning in student loans, credit card bills, and just keeping gas in the car to make it to work. With all of this creating a mountain of stress for American’s all across this country, we see more people struggling with depression and the general “I hate my JOB” syndrome. You are not suffering alone in this, but I feel that as a nation there is much we can do to help promote a healthy financial lifestyle. Now, take it from me when I am no expert on money matters — I am quite the novice — It took me many years to get a hold of how to manager my personal finances and I still struggle from time to time with my wants and needs always battling like a conscience on each shoulder, but it’s time we started listening to the needs.
I have come to see that this is our problem — people who struggle with saving money I believe (and again from my personal experience), have a problem with identifying their wants from the needs — and not even that — having the discipline to put their needs before their wants. We want to feel satisfied and that normally means that we are not willing to sacrifice and go without so that our goals can be met. I want to travel the world…how important is it really that I have my hair done every two weeks when I can do it myself at home, or buying a new pair of shoes every payday when I could be setting that money aside in a vacation fund?
My husband and I had a very real conversation about saving money not long ago and what it is going to take in order for us to meet our goals of wanting to live prosperously. Again, when you are living from paycheck to paycheck like most households are, it can be difficult to save – but it is possible. If you take a very real and honest look at how you spend your money, you will see that the majority of the time, that money you spent at McDonald’s or at the movies, could have gone towards a need. And now, when that need becomes and a “can’t live without” you are SOL because you don’t have it…this is what we can being “behind the eightball”. I guarantee that if you track your expenses for a week, meaning keep absolutely every receipt from all of your purchases for a whole week, you will see that a lot of your spending was unnecessary.
If you know that you struggle with saving money, be honest with yourself first. Admit that it is an issue and stop praying to God to get you out of situations that you have yourself created! Take a hold of your financial matters and you can start by following these simple steps:
1. Take a close look at your finances — take a look at your bank statements for the last couple of months and look at how you have been spending your money and what you’ve been spending it on. Make a list of things that honestly you could NOT purchased — basically a list of wants and needs from those statements. I know that you will be amazed at how much was unnecessary!
2. Once you have a clear idea of how frivilous your spending has been or not been — get a little technical — my suggestion would be to go online to Microsoft Office Templates and find a “Household Bill/Expense” spreadsheet. I have started using one of these to help me keep my bills in order and to help me track when they have been paid and when they are due. It also helps me stay disciplined and keep paying my bills as a priority.
3. Get a copy of your credit report! Afterall…CREDIT IS EVERYTHING!! If your finances will allow it, go to www.freecreditreport.com and take a look at your credit statement. I would even spring for viewing all 3 credit scores with each credit score company, i.e. Equifax, Transunion etc. It costs around $35 (a one time fee). The Free Credit Report site does require a membership fee of around $20 per month to view and monitor your credit on an on going basis, but it is definitely worth the investment. You will get credit score alerts when your score goes up or down, great tips on how to boost your credit, a monthly credit report so that you can track and monitor what hits your credit, and an awesome Dispute Center where you can dispute items that do not belong! If you cannot afford memberships, then you are entitled by law to receive one FREE credit report a year. You can go www.annualcreditreport.com for more information on that. Make sure to monitor your credit, and dispute anything that does not belong. Remember that revolving credit is your friend!! Car payments, department store accounts, etc. HOT TIP: Late payments stay on your credit for up to 5 years and can really hurt your credit score!! So, make sure to pay your bills ON TIME!!
4. Once you have your spreadsheet all set up and customized to fit your household budget, set reminders to pay your bills! Use Microsoft Outlook on your PC, or set reminders on your phone. Use a calender and always set the reminder for a few days out and then again on the day of to give you some time to prepare and make sure that you are paying your bills on time. Get in a routine of checking these avenues each day! If you are forgetful like me, it comes in handy to keep a planner with you! Paying your bills on time helps not only boost your credit score, but will allow for your bills to stay current. It’s always harder when you get behind and the next thing you know you are spending your entire next check on getting caught back up, and you’re robbing Peter to Pay Paul! Let’s break that cycle!
5. Set goals! It is important when you are saving money that you set goals, but most importantly, you set realistic ones. We all would love to save $10,000 in 6 months, but is that really feasible for you. What you have to come to terms with is that every dollar counts, so if you can only save $20 out of each paycheck then make that your goal. You’ve got to start somewhere. Take a close look at your finances and what you have remaining after you’ve paid all of your bills and save what makes sense. Don’ get overly eager to save a mountain of money when most of us don’t bring in enough to make that happen. If you are married, take a look at what you have left after maintaining your household and discuss an amount to save that is not only comfortable for you both, but helps reach your goals too! Work together and you’ll see faster results! Speak honestly about your bills and debt and come up with a plan together how you will tackle it. Remember, don’t leave anything out…anything that cost you money is a BILL! The worst thing that can happen is LETTING your bills and debt sneak up on you!
6. Auto Save! Most financial institutions offer great savings accounts that will automatically draft a certain amount from your checking and deposit it into your savings account! This is easy and hassle free and you wont even have to worry about saving it — let the bank do the work for you! Just make sure that you continue to factor in that amount that you are saving into your budget, so that it doesn’t get included with the money that you need to pay bills! There are even pre-paid card companies for those who cannot get a checking account, like Netspend, or through American Express. Both of these pre-paid card services are excellent, and if you have direct deposit your paycheck with them, allow you access to your paycheck 1 to 2 days sooner. They also won’t charge ridiculous fees on every transaction as long as you direct deposit with them. You may pay one low monthly fee of aound $8 or $9, but it’s worth it! Netspend, for example, gives y ou a budget calculator, an auto-save feature taking a specified amount of your choice from the checking and moving it savings for you, and a Spend Tracker where it divides what you spend into a PIE graph and gives you a compete breakdown on how your money is being spent! AWESOME!!
7. SACRIFICE! Okay, so this is probably the hardest part about saving money — and you’re going to have to do this one day at a time, but trust me, it can be done. Even if with every time you are about to spend money, you have to ask yourself, do I need this, or do I want this? That’s great way to help you. You must remember that those jeans or those shoes will be there! That you have food at home and you don’t need that burger or that extra Latte! Be strong and diligent! It pays off in the end…literally!! Save up some money so that you can get to the next step of the process which is to….
8. TREAT YOURSELF!! This is an important part about this process. Once per month it is important that we treat ourselves to a small lluxury. Now, this doesn’t mean blow your savings!!! This means that you can indulge yourself with something you like or like to do once a month, however, if you are in the baby stages of this process, I would wait until you have a couple of months under your belt before you get in the routine of treating yourself. What is important about this is that you want saving to be fun…and not DEPRESSING!! You want to still be able to live a normal life, and feel rewarded for saving, but also keeping at the front of your mind, that you are saving, and saving is virtually impossible when you are spending!
9. 401K and Retirement Savings Plan – Most of us that work for large corporations should be offered a 401k or retirement plan of some sort. I am always for this! This is a good way to help build your retirement which is really important, however, you should get to a place where you can afford to contribute. Contact your Benefits Department and see what the contribution levels are. You may not be able to contribute the max of 4 or 5%, but you may be able to do 2%. Retirement planning is vital and important as you grow older. Look at all of your options! And, don’t forget your KIDS!! Look into what type of savings plan you can open for them…there are lots of options out there to help you prepare to send your kids to college if that’s what they choose.
10. Last but not least, Emergency Fund! I know this may not be at the forefront if you are starting to save, but you are saving towards a goal. That may be vacation, retirement, or this…an Emergency fund. It is good practice for each household to have at least 6 months of living expenses saved up in case of an Emergency. So, please make this a priority! A “Rainy Day” fund as we call it can come in real handy if for example, you blow a tire, or you car needs major repairs, or you or your spouse become injured, or any number of things! The scenarios are endless, and the bottomline is, is that we need to start being MORE PROACTIVE about saving money!
I hope that these tips help! The most important thing to remember is to not let the task of saving money become mentally hard. Remember to save what you can because it adds up! Take it a day at a time and before you know it you’ll be where you want to be and on your way to financial freedom!! It’s hard out here for everyone right now, and many people are struggling to stay above water…these are the times where we must learn to sacrifice and be determined to succeed!