By Corey Lewis, CPT, CSCS
I’m right there with you. In a tough economy, I know how important every dollar can be. Now’s a great time to review your finances and make decisions about how you can cut back on unnecessary areas so your money can go where it’s needed most. But financial health is more than just setting a budget or figuring out how to make more money.
One of the fastest ways people see their bank accounts dwindle each month is due to “leakages” with finances. These are often small things, like a streaming subscription or a long-forgotten app with a monthly fee that’s still charging your card. These amounts might be so small that you’d never notice. But they can quickly add up. In our subscription-based economy, it’s easier than ever to sign up for something and then quickly forget all about it.
Don’t let these charges, no matter the price, keep draining your paychecks drop by drop. Here are a few strategies and tips for you to get a greater understanding of overall financial wellness. This article will focus on learning how to budget, eliminating recurring charges that drain your bank account, and. lastly, changing your mindsets about money and spending.
Start-up subscription management service Truebill says the average user has at least 11 recurring charges on their bank statements. These often include Netflix, Spotify, Amazon Prime, and GoDaddy domain name hosting.
One of the best ways to get an idea about how many subscriptions or other recurring charges you have is to sit down with your credit and bank accounts. To begin with, build a spreadsheet of expenses. This will let you identify charges that pop up on a regular basis. You might be surprised just how many you have!
Next, it’s time to get creative. If you are living with roommates, see if you could share the Netflix subscription in your house or apartment. Speak with your family and see if you can be added onto their Amazon Prime plan.
Like getting magazines in the mail? See if you could read many of the same articles on the magazine’s website, or switch up your consumption habits. For example, if you enjoy looking at beautiful home decor, there’s a ton of free blogs or Instagram pages you could follow that could rival some of the industry’s biggest publications!
For the subscriptions or recurring services you don’t need, simply unsubscribe and wipe those from your budget. Make sure to study the fine print for anything you do wish to cancel. Unfortunately, sometimes buttons to opt out or stop billing are hidden inside an app or a website menu.
If you’re having some trouble tracking and cancelling recurring purchases, think about investing in an app or program to help. I’ve heard good things about AskTrim.com and money saving apps like ClarityMoney, but you’ll want to do your own research to see if tools like these are good for your situation.
It can seem hard to save money, especially if you’re out of work or your business is suffering due to the novel coronavirus. But no matter the state of the economy, there are tried-and-true tips that can help you maximize every dollar that comes into your bank account to improve your financial health.
Some people struggle with saving money because they don’t know a good target to aim for. Many financial experts recommend that you should aim to put about 10% (or more) of your income into savings. This ensures that money you’re putting away is proportional to the money you make from your job and is on pace with your cost of living if you become unemployed or lose an income stream.
It’s easy to not save any money if you’re spending everything you make. Setting up automatic deposits into savings accounts, Roth IRAs, or college savings plans for your kids are savvy ways to build up accounts without even thinking about the money. After all, it’s automatically taken from your account at certain intervals.
And you may consider putting some of your money in ETFs, mutual funds, or high-interest CDs so your dollars can work for you. This can help you make more money, provided you invest in an educated manner.
The fallout from the COVID-19 pandemic has left many people struggling financially. Fortunately, there are a few unique opportunities to build up a larger savings account by taking advantage of policies from the government and financial institutions.
For example, many banks are agreeing to waive some fees and offer special debt management opportunities for account holders. The federal CARES Act also suspends payments on some federal student loans until the end of September, without any affect on your credit. Policies like these give you some time and ability to change how you pay. This can help you re-allocate money to other areas of your budget or help you build a larger savings account for the short term.
Earning and spending money comes down to your mindset about money and the environment you’re in, for the most part. If you’re constantly inundated with offers to buy and spend, you’re probably going to watch more money flow out of your bank account. Take steps to unsubscribe from digital and physical mail catalogs, credit card offers, and other junk mail that often pitches a product to buy or a subscription to sign up for. Websites like DMAChoice.org and Catalogchoice.org are simple ways to get your name and address off of mailing lists, cutting down on potential temptations to spend.
Many people struggle with budgeting and financially planning when it comes to food. When it’s time to go grocery shopping, don’t purchase more than you actually need. Buying in bulk is only smart when it actually saves you money, not when you’re buying more than you need since it seems cheaper.
Changing your beliefs about food will also change your spending habits. For example, dinners and lunches don’t need to be large affairs with a lot of food. Don’t be afraid to serve and eat simpler meals and get creative with your cooking to make your budget stretch.
No matter your monthly income, reaching a state of financial wellness is possible. Getting serious about budgeting, taking advantage of coupons, being smart with your savings, and cutting costs (no matter how small) will help you balance out your finances. Focusing on your financial health can eliminate the stress that comes with worrying about your spending habits each month.