The “B” Word – Step 2

Now that you’ve spent at least a month tracking your spending habits it’s time to take a close look at where that money is going.  This is going to look different for everybody.  Maybe you go out to eat several times a week, or that drive-thru coffee is adding up.  For some it will be splurging on clothing, movies or impulse buys.  And for many, I suspect there is credit card debt or student loans taking a big chunk of your paycheck.  <– we’ll get to that in a bit.

Once you’ve identified your biggest “unnecessary” spending area it’s time to tackle it.  If you frequently pick up a coffee on your way to work – cut back.  Make your coffee at home a couple mornings a week.  If that’s too big of a sacrifice consider downsizing the cup size you purchase.  Chances are you don’t need the extra calories and caffeine anyway.  If you buy movies or books, try checking out your local library or free ebooks.  Curb impulse buying by avoiding cruising the mall when you’re bored.  Have a specific shopping list when you do go to the store and only buy what’s on your list.

Another idea to consider is keeping a large change jar.  Every evening empty your pockets or change purse into the change jar.  You’ll be surprised at how fast that adds up.  Kids love to help sort and count piles of change.  Have them help you roll your coins and take them to the bank.  Tempting as it is, avoid the change counter machines in the grocery stores.  They keep a portion of your total.  It’s *your* hard earned money – take the time to count it yourself!  This is especially easy if you do it while watching a movie (that you just rented for free from the library).

Now that you’ve freed up a little extra money each week what do you need to do with it??  I’ll tell you.  SAVE IT!  I know it’s so tempting to spend it or to apply it to the growing credit card debt.  Unless you already have a good sized amount in your savings account it’s actually not a good idea to apply that extra money to debt.  What happens when the car breaks down unexpectedly?  Or you have an emergency trip to urgent care?  Or your washing machine floods the laundry room?  Right.  You pay for it with your credit card.  If you have an emergency savings account you can plan for those emergencies without adding to your debt. 

Save up that extra money until you have at least $1,000 in your savings account.  If you’re like me and you can justify that new pair of jeans as an emergency then find someone that will hold you accountable.  All emergency spending has to be cleared through them.  It’s so important to have that savings account if you plan on getting out of debt.

Finally, there are some of you that are going to look at your spending and you’ll find you don’t have a lot of extraneous spending to cut back on.  Take a closer look.  Are you paying for a cell phone and a home phone?  Do you need both?  Be sure to check you aren’t paying for more minutes than you actually need on your cell phone plan.  Can you cut back on cable?  Maybe drop that movie tier – since you’ll be renting movie at the library for free anyway.  The grocery budget is another place to take a closer look.  Most of us give in to impulse buying at the grocery store.  I’ll be writing a post on grocery shopping in the near future.  Is it possible to shop around for cheaper auto insurance?  Check the gas budget.  Maybe you can combine errands or carpool.  Or drop the gym membership and walk to some of those errands.

Your goal should be to cut back on spending and pad your savings account!

Need some spending money?

Let’s face it, who doesn’t need some extra spending money?  The question is – how to make it?!  There’s always everybody’s favorite retirement plan…. the lottery!  But let’s not kid ourselves.  That’s a better plan for throwing our money away.

So what are you supposed to do when that Vegas trip is coming up or your coffee fund jar is running low?  You could go and get yourself a 2nd job but chances are one job is enough!  Most people turn to the internet to find extra money.  A very popular way to earn money online is to fill out surveys.   Let me share my tips for online surveys….

First.  You need to find a credible site that pays out.  My #1 favorite is http://cashcrate.com/585781 .  They do have a minimum pay out of $10.00 but I did that with my very first survey!  Their survey listing is awesome!  You have your choice of sorting – 100% free or trial offers.  Before you even start filling out the survey they tell you exactly how much they will pay you and if it’s a trial offer how much it will cost up front and how much they will pay.  For example, my first survey was for a trial offer at Blockbuster.  At the time I paid for a $10 trial but http://cashcrate.com/585781 paid me $20.00 for it!   Basically I got paid $10 for the trial AND I got free movies for two weeks!!  There are also 100% free surveys to fill out.  Those can be sorted by payout, name or newest.  Not to mention the 2 daily surveys for a guarenteed $.60 a day = $18 a month!  Easy money!!!

Second.  Get yourself a spam email account specifically for filling out surveys!  (Be sure to sign up with http://cashcrate.com/585781 using a valid email address that you check daily for any news/announcements from http://cashcrate.com/585781 )  Why do sponsors pay to have surveys filled out?  So they can get your contact info.  Personally I don’t mind receiving coupons and samples in the mail but I hate to get spam in my email!  If you have a spam email account you won’t have to worry about clogging up your inbox with offers from “V1agr-a” etc… 

Finally.  I’m sure you’re asking yourself “Really?”  Yes.  Really.  Within a couple of hours I was up to $42.00.  No, it’s not going to make me rich but it’s good petty cash for very little effort on my part.  I’ve read other accounts of people making $1,000+ per month so I know it’s possible to make some serious cash if you’re willing to put in a little more effort.

I’d love to hear if you’ve tried http://cashcrate.com/585781 and how it’s going for you!

The “B” Word – Step 1

The first – and most important – step in money management is to know where your money is going!  Sure, it’s easy to list off things like rent/mortgage, car payments, utilities and groceries but what about after that?  Where are all of those nickel and dimes going?  Chances are you don’t know.

There are many different ways to track your spending.  The cheapest way is to record every penny spent using a spreadsheet software or good old fashion pencil and paper.  The downside to that is it is time consuming, prone to error and is difficult to sort by category (which will be important to see where that money is going). 

If you’re willing to spend a couple of bucks (or use trial periods) there are several programs out there that will tie into your bank account and retrieve all of those transactions for you.  Of course this only works if you use your bank card for all of your purchases.  This can be a little time consuming if you don’t maintain your account daily/weekly and save all your transactions for the end of the month.  But if you stay on top of it this can be the most effective way to see where all that hard earned money is going. 

I suggest tracking your spending for a minimum of one month but two or three months will give you a bigger picture.  Don’t forget to watch things like car maintenance, yearly memberships/subscriptions, home improvements/maintenance and summer vacations.  Many people forget to look at how much they spend in those areas and in turn, forget to budget for them going forward.

Get started!  The sooner you find out where you’ve been the sooner you can figure out where you’re going!

If you’re already tracking your spending drop a comment and let us know what method you use.