These days, people are being smarter with their money. They’re prioritizing life experiences over throwaway items, opting to cook fresh, healthy foods at home over going out, and being more open and honest about finances with their partners and friends. If you’re looking to be smart with your money, start with a few basics pieces of advice.
Evaluate Your Finances
You may think you don’t overspend each month, but little purchases add up. Evaluate
your spending habits for a month to see what categories you spent the most in and then decide how much of that spending you can afford to cut back from your budget. Something as simple as choosing to eat out at your favorite restaurant only once a week instead of three times can save you hundreds of dollars.
Opt for Free Entertainment
We’ve been programmed to think that the only way to enjoy a night out is by spending money, but you may be surprised how many free events are happening locally right in your own neighborhood. Check the local paper for free events such as car shows, music festivals, and community movie nights
and take advantage of them. The library is also a great tool for free entertainment and because they’re so often overlooked, they’re slowly dying. Instead of forking out money to go to the movie theater, rent a classic flick from your local library instead.
Bundle your Insurance
If you pay separate companies for your homeowners insurance and automobile insurance, consider bundling them with one company for additional savings. Most insurance companies offer discounts if you bundle your services, so you may see a reduction in your rate by combining them.
Make a Budget
This sounds like a simple notion, but you’ll often see this advice stated again and again because people so often fail to follow it. Create a monthly budget and aim to spend less than you earn. It’s one of the easiest ways to be smart with your money, and if you cut the excess spending and live within your means debt shouldn’t be an issue.
Learn to Save
If you aren’t a saver, try to become one. If you’re the type of person who spends and money you have left over at the end of the month, then open a savings account and automate a portion of each paycheck to be deposited into it. After awhile, you won’t even notice the money coming out and your savings will add up over time.
Be a Savvy Shopper
Make it a point to be a savvy shopper by price comparing, using coupons, and looking for sales. Don’t buy everything in bulk, however, or you may find yourself wasting a lot of groceries unless you have a large family. Don’t overstock your cupboards thinking something will come in handy someday just because it was on sale either, or you may find yourself pulling long-expired foods from your cupboards years down the road.
You may want to retire at 40 and live on a yacht in the Mediterranean, but unless you pull in a serious amount of cash each year, chances are that goal isn’t very realistic. Be realistic, consider your lifestyle, and plan accordingly. Set short and long term goals for yourself and meet with a financial planner to figure out the best way to reach them.
Open a 401k
If you can, open a 401k to start putting money away for retirement. If you employer offers a company match, take advantage of the free money and put in enough to max out their contribution rate to help you put money away faster.
Don’t Keep up with the Joneses
It may be tempting to buy a 3,000 square foot house, to vacation in the Caribbean every Christmas, and own the latest gadgets, but try to resist. As your income goes up, keep your spending in check and try to resist the urge to keep up with the Joneses. When you’re feeling overwhelmed about your
finances, remember you’re not alone. In the end, you have to learn to control your money, not let it control you.