Imagine if your spending plan allowed you to do more of what you love to do. Could you finally go on that dream vacation? Could you create an account for emergencies? Maybe you could start chipping away at debt.
In this blog post, I am going to help you better spend your money on everyday purchases and monthly expenses as well as give you tips for future spending.
Spending money wisely starts with your mindset.
You can either think about spending money as a financially irresponsible action or as a way to accomplish your financial goals. At Green Mountain Planning, a budget is not a savings plan but rather a spending plan. Saving money does not have to mean you quit spending altogether, it just means you have to define what your top priorities are.
There are many ways to create a spending strategy, here are a few ideas…
Are you ready to start making changes? We recommend therule. Use 50% of your income for fixed bills, 30% for fun stuff and 20% toward savings and or paying debt.
Begin reflecting on your daily spending. Awareness can help you make simple changes and save money on activities such as eating out, entertainment and shopping.
Get creative at restaurants: My wife Meghan and I really enjoy going out to eat (although we do a lot less of that now with our eight month old boy.) Your social life does not have to stop in order to meet your financial goals. If you enjoy a glass or two of wine with dinner, consider calling ahead and asking the restaurant about corkage fees. Even with this fee, you might still save money by bringing your own bottle. Also, consider getting an appetizer and splitting an entrée.
Use cash for fun purchases: Use dollar bills instead of credit cards. Physiologically, it is much harder to part away from dollar bills than it is to swipe your card. My wife and I use the cash system and it forces us to think of every purchase we make.
Take advantage of free events: Zoos, museums andall offer free admission days which are great ways to save money and enjoy some quality family time.
Benefit from the money you are spending on taxes and HOA fees, sign up for your HOA and local county newsletters. You will be impressed with how many events are free to attend, some may even offer free food and drinks.
Delete your credit card information: Companies like Amazon have made it extremely easy to buy anything you want, whenever you want it. If you force yourself to input your credit card info every time you make a purchase, you might find yourself making fewer impulse buys.
This might take a little more effort, but the savings can really make a big difference.
Contact your cable company: You could lower your bill by as much as $480 per year by calling your cable company and changing your cable package. Ask about their current promotions, often times they are willing to reduce the cost of your current bill for 6 to 12 months. Make sure to mark the offer expiration date on your calendar and give them a call back to see if they are willing to renew the discount.
If that fails, consider TV streaming services like Sling TV. These services can cost as little as $25 per month. This means, you could save up to $1,200 per year by using a TV streaming service instead of cable.
Review your current cell phone plan: Changing your current plan or switching carriers are great ways to save money. Dropping your insurance can also save a couple upwards of $360 per year.
Home and car insurance: Your car and home insurance renew on a yearly basis, make note of the anniversary date and start calling insurance companies a month before your policies are set to expire and rate shop. If you do not feel like doing this own your own, find an independent insurance broker that can rate shop for you and get you the best deal. Be sure you are not getting inferior coverages when companies quote you their premiums.
Long Term Steps
Big financial milestones like buying your first home, taking a dream vacation or staying home to raise your child do not just happen, they require time to develop a vision of your ideal life and clearly defining what gives you financial satisfaction.
It’s important to know how to take inventory of your current spending plan, how to reflect on current financial satisfaction and how to set goals.
Track spending: Many people like to think they know where their money is going, but in reality they have no idea. Tracking your cash flow (which is your income minus expense) is vital to achieving your financial dreams. There are plenty of free and paid apps that will automate this process for you.
Reflect on your current financial satisfaction: Acknowledge areas of your financial life you are not happy with and think of ways your spending plan can help improve those areas.Here are some sample questions you can ask yourself: Are you satisfied with your ability to meet your financial obligations? Are you content with your spending habits? Are you happy with the amount of money you save and invest on a regular basis? Feel free to email me for a checklist that can further assist you.
Set goals: Instead of setting financial goals because you should, set financial goals because they excite you. Here is an example, I need to cut down on expenses so I can take my family to Yellow Stone National Park and I do not want to go into debt. Thinking of goals this way will keep you motivated in your journey. It’s OK to start small, any step will put you in a better position.
READY TO GET REAL WITH YOUR SPENDING PLAN?
All of our engagements begin with a free no obligation introduction or second opinion review.
Call me at 970-620-8688
Email me at
About the Author
For more than a decade, Nestor has helped his oil and gas professionals define their personal financial values to help build a plan that centers on rewarding outcomes. The journey, he believes, is every bit as important as the destination. He established Green Mountain Planning as a fee-only financial firm to avoid the pitfalls and conflicts of interest found in other agency settings. “I work for you, not any company or product.”