Seven Tips to Survive 2017
December is often an expensive month usually consisting of holidays, visiting with loved ones, and vacations. While this is a time of the year most of us look forward to, once the holidays end, it’s time to re-evaluate your finances for the new year. This can be a daunting task, which is why we are here to help you get started.
1. Create spending and savings goals
Creating a spending and savings goals helps you keep yourself accountable. Reflect on what you want to accomplish in the new year. Things to consider while creating spending and savings goals include outstanding debt, big purchase items, restorations for your home and so on.
For example, Sarah and I enjoy going on vacation in the summer. We also want to update our bedroom in the coming months. These wants are perfect items to factor into our spending and savings goals.
2. Create a budget
Now that you have reflected upon on your wants and needs for the new year, it´s time to put thoughts into action. You may have heard this before, but creating a budget is one of the most beneficial things you can do for yourself financially. Budgets allow you to map out your monthly income and expenses.
The key is to a good budget is that it must be current. The easiest way to do so is by creating an Excel sheet where you save to view throughout the month. Don’t know how to create a budgeting spread sheet? Don’t have the time? No worries! We already set one up for you. All you need to do is click here.
3. Cut down on your “fun money”
Have a look at the amount of money you are spending on non-essentials. Sarah and I refer to this type of cash spent as “fun money”. Say you spend $100 per month on non-essentials. Instead of spending $100 per month, keep $20 to put towards your savings goals. You’ll be surprised how contributing $20 a month can help you reach your savings goals.
4. Don’t neglect your debts
Debt is a topic most of us can relate to. Whether it is student loans, credit card bills, car payments or mortgages, most of us are owe something to someone. It is extremely important to understand the interest rates that are associated with your debts. If you have debt that is accumulating interest, try to make more than the minimum monthly payment.
Of course paying the minimum monthly payment is better than missing a payment, however there are financial consequences of paying just enough each month. The more you pay per month, the less interest your total balance will accumulate.
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5. Pack your own lunch to work/school
It’s time to realize how much money you spend on your lunch at work or school. Spending only $5 per day for lunch equals $100 dollar every month! By preparing your lunch at home you can saving at least half of the amount you’d spend at the local canteen. Just think, now that you are saving half of your lunch fund you can use that extra cash to save or pay off your debts!
6. Skip the Starbucks
Ever notice how many people are carrying thier “Coffee 2 Go” cups in the morning? We love Starbucks just as much as the next person, but spending $4 per coffee everyday adds up.
By making your own coffee or tea in the morning you could save $80 per month!
7. Make your idle cash work for you
Most banks allow you to accumulate interest on your total savings balance, but these rates can vary from bank to bank. Compare the interest rate that your bank provides versus other banks in your area. For example your bank may be providing a 1.5% interest rate on your savings while another bank is providing a 2% interest rate.