Bonus: Best Money Moves!
Of course I have bonuses!
Create an annual budget! I got this idea from the famed financial planning blogger and Youtubers of One Big Happy Life. I've learned that if you look back over the course of a few years some things that come up are inevitable and they come up every year. And honestly, pulling money out of your emergency funds for things like Christmas, back to school shopping, typical car repairs shouldn't be needed if you do annual planning. You know that Christmas and birthdays are coming. Why not plan for it!? You know that the kids need new shoes, clothes, and supplies in July for school in August. Why not save for it ahead of time?!? Get my drift? An annual budget gives you a birds eye view of what expenses are coming and how you can better prepare for them. Also, think about it like this. You're the CEO of your household. Businesses create an annual budget each year for everything from office supplies to large scale investments. You should do the same!
Setting one goal at a time. This may be a slow approach to conquering financial goal but if you are the kind of person that can only focus on one goal at a time then take this approach. Its better to constantly move the needle than to just sit there and stare at it. lol
Spend vs.Save months So my husband and I tried this a couple of years ago and we were pretty excited about it. We were able to determine at the start of each quarter which months within that quarter would be a spend month, meaning we'd spend money on things we needed and some wants (within reason) and which months would be no spend months meaning we would only pay the bills and purchase necessities. That means no eating out, no online purchases, and no random Target runs. lol This method would allow us to not only tackle our annual spending plan but its also good for people like me that like to make a list and check it off. Spend vs. Save months also helps to save a lot of money in a short period of time without feeling deprived. If you're on a save month then there's an end date to the deprivation and you can typically loosen the reigns the next month. The first time we did this we were able to save about $1200 in a month. Hint: Remember to keep your auto savings active. This will help to boost your savings even more!
Make plans by paycheck (paycheck allotment). This idea actually came from a friend of mine. She knows who she is! One day we were discussing household money management and I mentioned how fearful I was that my husband was switching from a weekly paycheck on hourly pay to a set salary with a monthly paycheck. Even though it was a promotion and meant more money would be coming to our household I just didn't know how I was going to handle the change. Hmmm, maybe that was the bigger issue lol. She said 'no worries! the best thing to do is to determine which paycheck would pay for which expenses. Spread out all of the expenses by due date and amount then split up which bill comes out of which paycheck.' For instance, since my husband's paycheck was monthly it meant it was more money at once and it was on the last day of each month. So his paycheck would handle things that were due during the first week of the month i.e. the mortgage, car insurance, gas, groceries, etc. Then my paycheck would come the following Friday. So my paycheck covered things that were due between the 1-3 week of the month such as the baby's daycare, gas, groceries, internet, car note, student loans, etc. Because we get three paychecks a month even today, this method still works for us!
Round budgeting. This method is a little tedious but helps to constantly save even the smallest amounts. Once you evaluate your monthly expenses, round up to the nearest even dollar or five dollars and save the difference. Many banks offer this savings method as a perk. But if not you can also incorporate this as a way to reconcile your budget. For instance, if the internet bill is $67.99/month set your budget for $70.00 and after paying the bill transfer $3.00 into savings. Saving little differences like this helps to create the habit of always saving extra and not relying on just your auto savings!
Auto save!- Speaking of auto save, make sure that you have a set amount that your employer sends to your regular household account and an amount that goes to your emergency fund. Remember, when the getting is good, get it! You never know when you'll have to reach into your emergency fund and hopefully its never but life does happen, especially in this economy. So while you have steady income, instruct your employer to split your direct deposit between accounts. Our auto savings started at $25 then slowly increased to almost 8.5% of our current take home pay. I think the finance experts suggest you save at least 10% of your take home pay. We're not there yet but we're increasing it year over year!
These are just a few more money tips I've used to help us get closer to our goals. Let me know what you've incorporated into your savings and money management habits!