Saving money is hard……really hard. For many years, I was on the typical roller coaster of savings experiences, having plenty and then not having enough. It wasn’t until I started being intentional about my finances, that things became easier.
What I found helpful is finding something automatic and sustainable. Many times when we try to create habits for the first time, we go from zero to sixty, only to crash and burn. If we had planned better or set up a system then we wouldn’t have crashed in the first place. For years, I would over save on a monthly basis, only to have to use the funds to pay for some bill relating to kids clothing, car repairs, etc…in short I wasn’t properly planning out my budget to account for those times of year, where naturally you are going to have more expenses. So if you find yourself in that same situation, what do you do?
1.Go over your expenses for a 3 to 6 month period to get a realistic idea of what you spend. It does no good to guess your yearly output, as chances are, you’ll underestimate it. COUNT TWICE, BUDGET ONCE.
2. Come up with a system of accounts that work for you. Call them baskets, envelopes, wallets, really doesn’t matter, what matters is by doing this, you are telling your money where to go and ruling over it, not the other way around.
3. Decide how many baskets you want to deal with. In finances, as in life, I find simplicity is the way to go. I work with four categories in dividing up the family finances, they are BILLS, so mortgage, utilities, car payments, etc. are in this pot. Second is SPENDING, self explanatory, this is for the monthly spending that we do on food, miscellaneous, fun, etc. Third is GIVING, we attend church and believe in charity, so we have a fund for that and finally, SAVINGS for long term wealth building and retirement.
4. I recommend finding a one stop shop, I use a brokerage, as it offers cash management and investing capability. I used to rate chase and had multiple accounts, at multiple institutions, but have found this holistic approach to finances and simplicity to be well worth, what amounts to peanuts in extra interest. You have one place to log into, one place to protect against identity theft and when tax time comes, one place to draw 1099 forms from. Just makes your financial life much less stressful, this is my opinion, but have found similar sentiment from others.
In closing, be HONEST with yourself and your situation, if you can only save $5 then save $5, if you can save $500, save $500. Putting a realistic plan in motion is the best way forward for success. Be HONEST, be AUTOMATIC and be SIMPLE when it comes to your finances and you’ll be able to get back to the more important things in life, FAMILY, FRIENDS and EXPERIENCES.
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