Summer is finally dwindling away, along with all the travel and exciting times we’ve had. As we start to focus on back to school and the holiday season, I’ve taken the time to take a fresh look at the dreaded budget.
If there is one thing I absolutely despise about being an adult, its dealing with finances. You are faced with the difficult decision of having to remember that instead of buying the leather bootie for fall, you should probably make sure that your utilities stay on.
We’ve become so accustomed to letting our online banking and nifty debit card track all of our purchases, that what we are actually spending our hard earned dollars on gets away from us.
For David and I, we both know how much money we make and never get an alert from our trusty bank account that funds are low. This is what I’m calling strategic spending! Even without that alert buzzing off, its been a thing of the past to actually pay any attention to where our money was truly being spent.
We sat down and dived deep into our finances – like the actual purchases made with both of our debit cards – to see just how it all shaped up. I’ll be completely honest with you – because we are all adults here and honesty is key when talking about such a heavy subject – it wasn’t pretty. Between the ridiculous amount of food, random purchases everywhere, and our regular bills we discovered that we were nickel-and-diming (no pun intended) ourselves. After our preliminary run through of finances and rebuilding our budget to reflect our additional income (i.e. updating our monthly income with my current salary!), I came up with a few tips to share that would make it helpful for you before the holiday season is upon us.
Tip 1 | Set financial goals
Create your budget and set realistic goals that appropriately suits your monthly income. Whether it be paying down your student loans, credit cards, auto loans – its nice having a plan of action. Goals are important for recognizing the amount of work you need to put into succeeding. Set those goals and when you check one off, enjoy a nice adult beverage for celebration!
Tip 2 | Review all of your purchases
Take the time to go through your purchases each month and look closely at where your money is going. David and I made a conscious effort to organize all of our purchases to fit into specific categories on our budget. As we were reviewing purchases, we couldn’t believe the amount of frivolous spending we did. Not much, just $5 here or $7 there. In the long run, those small purchases start to add up and you start to wonder where it all went.
Tip 3 | Track monthly/annual subscriptions
Keep a log of all your subscriptions that you pay on a monthly/annual basis. David and I were aware of our usual monthly expenses – Dollar Shave Club, ipsy, Netflix, Hulu, and a few others. What we failed to realize is that our annual renewals all happen to take place around the same time as well – Amazon Prime, O Magazine, and a few others. By paying close attention to these subscriptions, we can easily flag them in the appropriate category that they need to be filed under in our budget. We are slowly organizing all of them in an electronic file that we can both view (even though I may need a paper copy for reference).
Tip 4 | Ditch the plastic
Oh debit cards! They seriously make our lives easier every day with the ease of use when all you need to do is swipe for a purchase. That’s where you easily end up buying the unnecessary things that you don’t really need, but absolutely want. David and I decided that for those frivolous expenditures, we would stick to a motto. “If you can’t afford it with cash, you don’t need it.” We are setting aside a monthly cash allowance for each of us to use as our spending money. Instead of using our debit cards for those extra charges, cash will be the option. If you can’t buy it with cash, leave it there!
Tip 5 | SAVE
Save, save, save, save! I can’t stress this tip enough. A little goes a long way, so capitalize on your budgeting moves. It’s recommended that you save at least 15% of your monthly income, but with all of the expenses that our generation is faced with (student loans, credit cards, and auto loans) we have to be smart about the way we save. Look at your budget and pull together your resources to put a small amount into your savings account each pay period. It’ll pay off in the long run and you will feel so much better when you have a comfortable little pocket of cash to fall back on in case of emergencies.
A few additional notes to remember while going through these steps and dealing with the nitty gritty of finances:
- Don’t be afraid to discuss finances. You have to put it all on the table if you want to get shit done. Excuse the language, but its the truth. If you can’t be open and honest about all of your financial goals, then why are you even together in the first place. Make sure that you are seeing eye to eye with everyone involved in your cash flow and working towards the same goals.
- Utilize all of your resources! Every financial institution has a plethora of tools for their customers to use to get their finances in order. Don’t sleep on these people! David and I have USAA which has a budget tracker, financial goal tracker, and so much more. We were able to update our budget and indicate different categories to track our finances. With the financial goal tracker, we set up a debt reduction plan for our loans and credit cards – to manage along side with our budget. In addition to your financial institution, both iOS and Android have a variety of apps available to help with budget and financial goal tracking. We’ll get to that in a later blog, because I went on a download spree to see what will work best for our current tools.
- It’s going to be difficult before you see any real progress. Upon our real first glance of our finances again after who knows how long, it was depressing seeing how relaxed we had fallen into
ridiculousunnecessary spending habits. It was the point where we realized that we could be saving so much more money by changing up the simple things. After sitting down and revamping our budget, I’ve realized that these next few months won’t be easy to adjust to. All of the fall wardrobe I’ve been drooling over just won’t be in the cards – for full price. Happy hours with friends may need to be far and few – not one or two a week. You have to make sacrifices in order to see it pay off in the long run.
That leaves us here with a fresh start and a plan to tackle it all. I’ve got a few more things planned to share on how David and I are working to tackle our budget, spending habits, and financial goals. If you have any resources or advice, leave them in the comments.
Don’t forget to pin and use these tips to save some nickels and dimes to either treat yo’self or get ahead on your holiday shopping!