In a perfect world, all of your wants and needs are covered by whatever you bring in as income and everything else goes to savings. But we don’t live in a perfect world. Often our needs and commitments take precedence over saving or having fun – which can lead to overspending and financial strain.
So how do you make sure you’re stretching each dollar (without sucking the fun out of life)? By spending smarter.
Keep a Budget
Are you sick of hearing this? Too bad. Keeping a budget – and keeping track of everything coming into and out of your accounts – is the single best way to stretch your dollar. Now, I’m not talking about making sure every dollar you own goes to paying bills or into your savings. That’s not realistic, sustainable or even fun. But make sure the fun money you set aside for entertainment or the occasional splurge doesn’t put undue stress on the rest of your expenses or your financial future.
Know Your Triggers
I know myself well enough to know that I don’t make the best spending decisions when I’m hungry. Sometimes that means buying too much food, not shopping for the best prices, or forgetting to use my coupons. That’s my trigger.
Your spending triggers may be completely different. Relying on retail therapy – shopping when you’re sad, upset or stressed – to manage your mood is a guaranteed way to overspend. Also keep in mind that some environments, like craft fairs, auctions and home shows, are designed to make you want to spend. And, as important as they are, your friends and family may be feeding into your bad spending habits with peer pressure in social situations or competition to keep up with those proverbial Joneses.
Cash > Plastic; Debit > Credit
According to a recent report from Experian, the average American carries about $5,500 in credit card debt. With interest averaging 15-20%, it’s just exacerbating any budget shortcomings one might be facing. Having and using a credit card responsibly is hard for a lot of people.
If you find yourself unable to pay off your balance each month, try to stick to debit card purchases. And if you’re still having trouble staying within your budget, try a cash-only approach.
Review Auto Payments
Streaming services that you forgot to cancel? The premium version of that app you downloaded last year? That unused gym membership? If you’re not actively using it, then take the time to cancel it. You may be surprised how much you end up saving over a year.
If picking through a few years’ worth of bank statements to track down all of those monthly or yearly recurring payments doesn’t sound like your idea of a good time, there are a number of apps that can do the hard work for you. For more information on how uncover your automatic payments, check out this article.
Use Your Tools
When it comes to being a smarter, more informed consumer, there’s no better tool than the internet. From finding promo codes and discounts to researching products, it’s my first stop before making most purchases and how I make sure I’m paying as little as possible for it (I love coupons and, much to my kids’ chagrin, I’m never afraid to whip one out when I have it; not sorry). Eleanor Henderson, my Bank Mutual colleague, goes into great detail on the thought process that, ideally, should go into making a purchasing decision, so check out her article to learn more.
Watch Bank Fees
This is probably going to sound strange coming from a bank, but avoiding fees isn’t impossible. You can turn off your overdraft permissions on your account. Maintain your minimum balance or bundle products to avoid maintenance fees. And, if you need cash, take the time to use one of your bank’s ATMs – usually, you get charged by the owner of the ATM as well as your bank if you use one that’s out of its network. If you happen to be a Bank Mutual customer, there are fee-free branches and ATMs all across the Milwaukee area for you to use.