I get asked frequently – what advice would you give to those who are struggling to make ends meet? If you are struggling to make ends meet, there is either a major problem with your spending/saving habits or you need to pick up the hustle and start making more money. For most of us, the problem is not having a strong hold on where our money is going on a daily basis. Anyone who makes saving money a priority is capable of reaching their financial goals, especially once you know how to change your nasty spending habits:
Step 1: Track spending for the next two weeks
Create an account on Mint.com and sync your accounts so that you can have an electronic diary of all your spending. If you buy something in cash, write it down in a notes section of your phone. At the end of the two weeks take a look at where your money is going. There’s a good chance you’ll notice that you spend a lot more on needless things than you anticipated, and this exercise can help you to gain some awareness and put things in check.
Step 2: Figure out how to cut spending
For example, when eating out:
- Share meals since restaurant portions are often way too much food for one person. Most restaurants are happy to split the meal and will even put it on two plates without a charge.
- Order an appetizer for your meal. It’s a more reasonable amount and less expensive.
- Skip the drinks — both non-alcoholic and alcoholic. Drink water instead. It’s free and good for you.
- Take leftovers to go and you’ve got lunch for the next day.
Check your monthly expenses
- Could you cancel cable and go with premium membership services like Hulu plus or amazon prime instead?
- Are you using all of the cell phone services you’re paying for, or do you always pay overages and need to change your plan?
- When was the last time you called your internet/cable provider and asked for any promotions or to lower your bill? (this works)
- Consider increasing your automobile insurance collision and comprehensive deductibles. Simply increasing your deductibles from $250 to $500 could reduce your premiums by 15% – 20%.
Step 3: Change your spending habits
- Stop using your credit card so much and reacquaint yourself with cash. When shopping ask yourself, “would I buy this if I were paying cash?”
- Don’t use shopping as a way to socialize with friends. Meet for a coffee or take a class at the gym together instead.
- When you DO have something you really want, put it on an “Want” List. Allow yourself to wait before running out to purchase it and see how many things drop off the list after a week or so. For the things that remain on the list, use sites like eBay and Amazon to find them for less, and check for promo codes on sites like Retailmenot.
- Before you buy something, think about how many hours you needed to work to pay for it. When you think about an $80 dress as being 5.5 hours of work on a $14.55/hour wage, you may not deem it worth the effort.
Even when you think you’re doing a great job at cutting expenses, there are always ways to trim your spending that you may not have considered. Remember, the small bad habits and expenses that you pay no mind to are the ones that could be keeping you broke.
Do you have a go-to money saving tip you can share?
