Tips for Saving and Budgeting Your Income

  |     |   Ways to Save

cash and change on a table

It’s a new year and it feels like a fresh start, a clean slate, a new chapter…however you would like to define this new year, it is a time where everyone is setting the foundation for 2020. One of the most common new year’s resolutions is saving money and as easy as it sounds, it takes discipline to stick with it. Here are some tips to help you on your money saving journey.

Do you know where your money is going?

Before you do anything else, take a look at your accounts and determine where you’re spending money. You can do this by tracking your purchases through apps like Mint, Albert, or Clarity Money, or you can create a categorized excel spreadsheet and include everything you spend each month. By doing this, you’ll see how much you spend on restaurant food, bills, entertainment, gas, etc. You may be surprised by the outcome! Note: Remember your budget should be adjusted monthly as there will be different things that may take priority such as holidays and birthdays.

Be intentional

A major part of budgeting involves being intentional with your spending meaning that you focus on your necessities rather than your wants. Transportation, housing, food, and utilities are amongst the most essential items to start budgeting around. Once you have determined what you need, then you can determine how you want to distribute the rest of your income.

Cut out unnecessary spending

Once you’ve tracked where your money is going and how much you have left after you’ve accounted for expenses, then look at all the unnecessary things that can be cut out. Most find that they spend more money than expected on coffee, restaurant food, gym memberships that they don’t use, or even cable! These are items that usually are the first to be completely cut out of spending or are tracked more closely so that you can reduce your monthly spend. For example, instead of buying the $5 latte, try switching it out to a $2 regular coffee with a pump of syrup! You’ll save a couple dollars. That doesn’t seem like much daily but it adds up in the end!

You got food in the house

Speaking of unnecessary spending…a major money eater is take out! Ordering from Uber Eats or Grubhub because you don’t feel like cooking or buying lunch everyday instead of bringing your own will have you looking at your account like “wow! I can’t believe I spent $27 on a meal that would’ve been $15 if I just went in person.” These things add up quickly especially since service and delivery fees are high these days. The best way to keep this spending under control is telling yourself “I GOT FOOD IN THE HOUSE!” It really is a mental thing sometimes. You don’t always need to buy restaurant food because there is probably something you can whip up at home.

When you head to the grocery store, be sure to create a list with the “I got food in the house” mindset. Be sure to buy food that you can use to meal prep and create multiple dishes with such as chicken breast. A large pack of chicken breast can be used to create chicken alfredo, chicken fajitas, a salad, homemade chicken fried rice – the options are endless.

Make progress towards your debt

Also, in your budget should be a plan to decrease your debts if you have any. There are different methods that can help such as the snowball method, paying off the smallest debts first to eliminate them before moving on to bigger ones or the avalanche method which requires you to make the minimum payments on all debt, then use any remaining money to pay off the debt with the highest interest rate.

Stick to the plan

The only way that your money saving journey ends up successful is if you stick to the plan! If you have a plan to eliminate credit card debt, then stop using your cards. If you want to spend less on restaurant food, create weekly menus and cook more — what’s better than a homecooked meal anyway! There will be times where you feel tempted to spend frivolously but remember the end goal is to see commas in your bank account!

Bonus Tip: Use cash! Instead of swiping your card for every purchase, take a out a set amount of cash to use weekly. This helps to control overspending!

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