Welcome to part three of the GYST (Get Your Shit Together) series. Every spring we all get an urge to clean, organize, and refresh our lives and this series will help with that! If you missed them, I will link to parts one (spirit) and two (body) here.
This week we are going to talk about resetting our money. Yeah, most of us probably need that, huh? lol I know I can’t be alone.
At the New Year, I had such good intentions! I had plans for a debt snowball to pay off my debt, and plan for living a low-spend year with intermittent no-spend weeks and months. If you aren’t sure what those things are, keep reading as I will go over all of them.
As the weeks roll past, I find myself getting more lax with my spending. An impulse buy there, an “I’m bored so I’ll shop on my phone” purchase there…it adds up!
It’s gotten out of control and it’s time to reign it in! Let me share how I plan to do that and some other easy, effective ways to get a better grip on your finances.
Start with your “WHY”…
First of all, as with everything, you have to start with why you’re want to do this. Do you want to save for a vacation, pay off debt, invest in your retirement? Do you really need new living room furniture? Need a down-payment for a house? Or if you’re like me…ALL OF THOSE THING (yeah, I’m in trouble, I know lol). Knowing your “why” will motivate you and will give you a clearer picture of your priorities.
1. Get really honest about your spending and budget…
List out every little expense that you have had coming out of your bank account. Get really honest about it! It will become clear very quickly where you need to make changes.
Subscriptions to every movie channel available suddenly don’t sound so good when you realize you’re spending $xx.00 every month that could be going toward your goals. It breaks it down for you and clarifies the bigger picture. Figure out what are “musts” and what are “wants”. Get rid of as many of the “wants” as you can.
2. Consider opening more bank accounts to divide your spending…
Here is something that I did. I opened up several additional bank accounts so that my money would be divided up, which is very similar to the “envelope method” made popular by Dave Ramsey (only digital). Twice a month when my direct deposit hits, I will have x-amount deposited into my “groceries and gas” account, x-amount into my “emergency fund” account, x-amount into my “bills” account, etc. This sounds like a lot of work, but it has helped me SO MUCH! Maybe it will help you too.
3. Debt Snowball…
You may or may not have heard of this. If you haven’t, in a nutshell, a debt snowball is where you list out all of your debts from lowest balance to largest (if that’s the order you choose to tackle them). You then decide on a dollar amount over and above your normal budget that you can commit to putting toward your debt (I committed to $200).
You proceed to make the minimum monthly payments on all of your bills, except you add that extra amount to the minimum payment of your smallest bill. Then, when you pay off that smallest bill, you take that minimum payment amount and the extra amount and apply all of that to the minimum payment on the next smallest bill until that is paid off. Then you take all of that apply it to the next one. And so on and so on.
As the bills get paid off, the amount that you apply to the next bill gets bigger (like a snowball rolling down a hill). For example: my smallest bill had a minimum monthly payment of $25.00. I applied $200 extra to that (so I was paying $225 monthly until it was paid off). It only took a few months to pay off. My next smallest bill also had a minimum payment of $25.00. So, when the first bill was paid off, I took that initial $225 and appled it to the $25 minimum payment of the next bill and now am paying $250 per month.
When that is paid off in a few months, I will apply that $250 to the minimum payment of the third bill. Make sense? It takes patience which is hard if you’re an instant gratification type of person, but is effective and worth it. You can’t go ten miles into the woods and expect to get out in five!
4. No- or low-spend weeks/months/years…
I had originally planned for 2019 to be a “no-spend” year for me. Meaning that if it wasn’t a fixed need, it wasn’t getting bought or paid for this year. Only essentials. Yeah, I knew that would go down in flames! (Woman, know thyself).
So, I decided to do a “low-spend” year instead. There are certain areas where I am WAY more likely to spend money…I’m sure we all have our own favorite money-traps. For me it is candles/scents, beauty products, cleaning/organization, crafts, and office supplies. How about you? Let me know in the comments what your pit-falls are.
I would be embarrassed to admit how many candles, lipsticks, etc that I own! Actually, no I wouldn’t because I own that I have a problem. lol However, because I know that I have other financial priorities right now (going back to my “why”), I am willing to sacrifice. So, what does this mean? It means that I am still allowed to shop, but I am only allowed to REPLACE.
I have to use a candle up and then I can replace it with a new candle. I have to completely use a moisturizer up and then I can replace it with a new one. See what I mean? One out, one in. This has already saved me a ton of money and it’s only April. But, I’ve gotten off track in the past month or so and have fallen back into old habits, which is no bueno. Time to get back on track.
In addition, every month I have a “no-spend” week where I only spend money on necessities (bills that cannot be missed or fuel for the car). Everything else (including groceries) is a luxury and cannot have money spent on it. Yes, you read that right…even groceries.
Lets be honest, if you’re anything like me then you probably have a pantry full of stuff that you can eat, you just don’t want to eat. Well, during that week, you will figure out the most yummy recipes you can using up all of that food. The reality is that the week will FLY by and you will quickly realize that it didn’t affect your life all that much…and you probably saved at least $100 in the process by not grocery shopping or eating out.
Decide early on what you will do with that savings. Apply to debt? Vacation fund? Emergency fund?
A few times through the year (decide early on and then stick with the plan!) plan for a month-long spending freeze. This is exactly what it sounds like…instead of a no-spend week, you’ll have a no-spend MONTH. It’s easier than it sounds.
What I do is at the end of every day I mark on the calendar if I successfully went without needlessly spending money. Sometimes there will be days when you blow it, and that’s okay. At the end of the month, count up all the days that you were successful and pat yourself on the back! Say you had three days where you went shopping or out to eat or whatever…that’s still like 27/30 days that you saved a TON of money!
5. Remove all of the shopping apps from your phone and avoid stores…
This is one of the simplest, yet most effective tips! If you’re an impulse shopper like I am, then the simplest thing to do is to remove temptation. Out of sight, out of mind.
Delete every single shopping app from your phone. Yes, even Amazon. Especially Amazon! Amazon, Sephora, Target, Kohls…whatever. Get it off!
If you SERIOUSLY need something that bad, you will have to go through the effort of downloading the app and signing in again. We can be so lazy that even that much extra work can sometimes be a detriment. lol
Another thing I started doing is ordering my groceries from Walmart. Order them online and pick-up is free! They load them straight into your car. I cannot overstate how much money this has saved me. By not going in the store, I have saved hundreds, if not thousands. Seriously.
I hope this helps you get a better grip on your money. Implement these tips into your lives and let me know how it goes! I look forward to hearing from you!
