A debt free tomorrow is closer than you think. Follow these 3 simple steps today!
It’s always easier to spend than save, which is why over a third of Americans carried some sort of credit card debt during the past year. Part of getting rid of debt is changing your mindset from a spender to a saver. It’s not an easy change to make, but the key is to forget the big picture for now, and focus on making the right decisions day-to-day. This is something you should be thinking about every time you take out your wallet at the store or credit card to buy something online. Here are 3 simple tips to help you along your way.
1. Keep a spending journal— A spending journal isn’t a budget, it’s simply a journal where you keep track of everything you spend money on, from your gas bill to your morning cup of coffee, every penny that gets spent goes in here to help you spend money wisely. Remember that a budget is essential, and this by no means replaces your monthly budget. However, the problems with budgets are that they keep you motivated for the first two days after you make it. However, it’s hard to make the right decisions every single day, since it’s so hard to relate that 99 cent candy bar to how it affects your budget at the end of the month. Keeping a spending journal makes you think about what you are really spending money on day to day, and it’ll surprise you how quickly the small things start to add up! Your spending journal doesn’t have to be anything fancy, but I would say that it has to be: 1. Accessible — you should be able to write in at least twice a day; and 2. Safe — this needs to stay with you, and can’t be on the back of a napkin or something you are likely to lose. You can buy a small notebook from Walgreens for 30 cents, or if you have a smartphone use the notepad program in your phone (don’t use this as justification to buy a phone if you don’t already have one)
2. Save money before you can use it — It’s hard to spend money that you don’t know you have, and the best way to do this is to save the money before you even see it. Most employers with direct deposit now allow you to split your paycheck between 2 or more bank accounts. If your employer allows this, I highly recommend that you figure out how much you plan to save and have that amount transferred directly into a hard to access savings account (just create a savings account and destroy the ATM card and checks, that way the only way you can get to the money is by physically going to the branch). You’ll learn to start living on less, and after a few months you might surprise yourself with how much extra money you have saved up. I say the same thing for trying to pay off bills. If you are working with a credit counselor you know that they take out the money every month after you get paid before you even get a chance to see it in your account. Do the same thing on your own — set up an automatic payment through your creditors to deduct money from your account on the very same day you get paid. If you don’t know how to do this, read our guide on online banking, or just call up your creditor and ask them to do it.
3. Lose the plastic — You’ve heard me say this time and time again, and multiple studies prove that this is true; you spend more when you pay with plastic. If you want to make a real commitment to saving money then keep one low interest rate credit card or debit card stored in a safe place in your home, and cut up all your other credit cards. Just the simple act of having to walk to the bank to get money or having to break bills at the grocery store makes you think about what you are spending money on. The card you have at home should be for paying utilities and for emergencies, and should rarely have to leave the house. Yes, this makes your life a lot harder, but that’s the exact reason that it cuts down on reckless spending.
Bonus: Unsubscribe from those bargain sites — Tell Groupon (or similar sites) you don’t want daily offers from them anymore, delete those daily coupon sites from your bookmarks. Daily bargain sites make you feel like you’ve saved money but more often than not just let you justify unnecessary purchases.