How to Save yourself from Financial Failure for 2010
September is here, and with it comes the firm realization that 2010 is almost over, reminding you of all that you still haven’t accomplished. If your New Year’s resolution list included saving more and owing less, now is the time to do a full audit, and reel yourself into place.
You’ve got four months to decrease credit card, fatten your piggybank, and still have money set aside for Christmas purchases, birthday gifts, and, yes, for the hyper Carnival lovers, a fete fund. Made some pretty bad decisions in 2010? You get a clean slate to start all over. We can’t go back in time to change bad decisions anyway. So here are a few tips to help you right the wrongs of the past eight months.
Write your budget
Pull up Excel and create a budget. Seeing how you spend your dollars on paper makes things clearer. Track where you’re spending money, so that you can see where you can tighten your belt, and save. That means writing down even the $7.00 you may spend on your daily fix of Supligen.
The tables mightn’t make you feel that much better. They may even give you a negative showing for income vs. expenses. If your expenses total to more than your income, then decide which expenses are essential, and which can be thrown out. Write down your financial goals as well, and revisit them at least every two weeks to make sure you’re on track. The trick to finding your footing is to spend less money than you earn every month.
Prepare yourself for the rest of your financial year. What do you expect to spend on? Are you expecting any income from side projects that will help to offset costs?
Plan expenses per month, especially the ones that come suddenly. Like your parents asking for money for ham, sorrel and curtains for Christmas. Is a friend having a baby or a wedding? Decide what you’re buying and how much you’ll spend. Forecasting your spending will help you to be very realistic on what your wallet can afford, and which areas to put your money towards. Include an emergency fund in there too. You never know. Your car might break down. You might get sick. Or the hunk or hottie down the road may invite you to their Christmas dinner, and you may need an outfit.
The one thing that will help you to achieve your financial goals in these last months is self-control. If you know there are certain stores that get you to spend money wildly, calm yourself before entering, arm yourself with a list, and do not pick up anything additional. A friend of mine often says Pennywise is the devil. You go planning to buy toothpaste, soap, and cream, and walk out with a special cream for your face, one for your hands, and another for your feet, and somewhere in there you just keep adding items to your basket until reality hits, and the cashier says, “That’ll be $595.22”, and you grudgingly hand over your hard-earned cash. The same applies to food. Don’t go out to eat as often, carry lunch to work, and when you go to the grocery, go with a list, and not while you’re hungry.
Minimize use of your credit card
You’ve probably already used at least 50% of your credit card limit. If you plan to clear this debt off before year’s end, the last thing you want to do is add to this growing pile of debt. Interest is real, and won’t the bank rub its hands in glee, when year-end comes and they can attach a tidy amount of interest to your balance.
If you’re an online shopping junkie, stop now. Oh yes, it’s Labour Day weekend, and your favourite sites are having sales, but remember Thanksgiving is coming, as is Christmas, so it’s wiser to pick one period to shop. Tell yourself you don’t need that super fabulous outfit you saw. Band yuh belly. As a matter of fact tighten yuh belt tighter than tight, and tell yourself the sacrifice is worth it.
Pay off your credit cards and other debt
Some of you may be thinking, but didn’t she just say this? No. I said minimise, and for the financially challenged, it’s important for me to be clear and reiterate. For some, four months just isn’t enough for behavioural change.
Minimizing or stopping use of your credit card altogether is pretty tough. So is paying it off. Don’t tell yourself you’ll pay off a lump sum. Unless you know you’re coming into a pretty pile of dough some time soon, that isn’t recommended. Besides, remember interest accrues monthly. You want to start paying off debt now. Even if it’s $500, that makes a difference. Plus, if you have to pay off the US$ side of your card, pay that first, as a higher rate is applied (and if you’re an online shopping junkie, you’ll have a few dollars well to pay off).
Start paying for things with cash too. Yes, it might suck money out of your account immediately. However, it saves you the future expense of additional interest, and if you have to use an ATM for your regular savings account, try to not use a bank that you don’t bank with. The Linx transaction cost will be higher.
If you’re paying hire purchase for a furniture set, see what’s your balance. It might be wiser to stop paying $100 a month, and pay off the remaining period. Remember, the smaller your monthly payment, the higher the overall cost in the end. Consider all of this, when deciding which account to pay off, or make a large payment towards.
You still have a chance to redeem yourself and your financial bottom line for 2010. Move now, and like Santa, you just might be singing “Ho, ho, ho”, when you see your bank account come year-end.
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