Whether you’re saving for a house or facing eviction, the tips below offer simple steps to become aware of your spending. Once you’re aware, you can start to make small changes that can lead to large improvements in your personal finances.
1) Your Credit Report
Pull a copy of your credit report and review
- late payment notifications
- utilization rates to see how close you are to maxing out a line of credit or a card
- variety: Is all your debt unsecured, or do you have a car payment or loan against another asset?
These three factors can have a big impact on your credit rating and your ability to borrow in the future. If you’re looking to buy a home, check the standard credit requirements or the VA loan credit requirements if you qualify to see your target credit rating. Remember also that a low credit rating can impact what you pay for insurance, so the higher you can raise your rating, the better off you’ll be.
Keep your receipts and review them regularly to get a handle on unseen money drains. Pay special attention to the times of day that you shop. Are you stopping for a treat because you had a rough day? Try to pare back to a cash allowance for such things and revel in the purchase, instead of falling back on it when you’re tired or discouraged.
In addition to tracking receipts, make sure that all adults in the household have at least a little private cash. Even $5.00 a week can get you a soda and a bag of chips or another little treat when you need it. If money is very tight, pair up for a special treat as a family to enjoy together.
3) Bank Statements
Keep an eye on small fees that you’re paying simply because you don’t have enough cushion. A minimum balance maintained in your checking account can save you $25 a month, and $300 is a nice chunk of change during the holiday season.
Find out what your minimum balance needs to be and scrimp hard for a month to build up enough to ignore. Don’t resign yourself to paying
- minimum balance fees
- overdraft fees
- late payment penalties
- excess interest
Create an amount of ignorable money to save those fees. By stashing away a small amount of money you can ignore when you don’t need it, using it only in an emergency, and your finances will improve rapidly.
4) Credit Card Bills
Every time you get a credit card bill, review it. Do you have a receipt to match what you bought, or do you notice anything else add about your purchase? What about subscriptions? Do you need your e-book subscription service, or can you sign up for the free library app and save a few dollars each month?
Subscriptions are tiny holes in your financial ship. No, $10 to $15 a month won’t break you, but $120 a year is probably at least two oil changes to keep your car going. When you look at it over the course of a year or two, subscription services may not be worth it.
5) Social Media
Instead of following social media for all the things you should want, look for free things. One free appliance or tool may not last forever, but simple things like basic baby clothes aren’t needed for all that long and many people get the use they need and pass them on. Check out local swaps, bartering organizations, and “free stuff” pages on Facebook and Craigslist.
Consider also joining a No Spend or Frugality group on social media. Even if you don’t go the whole hog on the program, you can get a lot of great ideas to cut expenses and free up cash by checking out the posts from these groups.
Eventually, you’re going to want to talk to a financial planner and set up a budget. However, until you’re aware of what you’re spending when you’re most prone to spend and what you’re buying, a budget is going to feel like money in jail. When you become monetarily aware, a budget is a terrific tool.