Holiday spending excesses lead many people to resolve to handle money differently in the coming year. All too often budgeting resolutions fall by the wayside before Ground Hog Day. When curbing excess spending sounds like a painful exercise in self-denial, is it any wonder so many people fail to keep budgeting resolutions?
If you want to fail, focus on what you have to give up. Instead, focus on the prize — the benefit you get from having money for important goals such as paying for college education, getting out of debt, buying a first home, and saving for retirement. Here are a few tips to help you manage your money better in the coming year.
Know where your money goes. Find out how much money comes in and exactly what you do with it. Carry a pad with you for a month or two. Record every purchase. At the end of the month, divide your spending into no more than a dozen categories.
Target eyebrow-raising surprises for spending cuts. Once you know where your money goes, it is often obvious where to cut back. Watch the little things you do every day as the cost can really add up.
Set realistic and specific goals. A specific goal includes the cost of the goal and the date you plan to achieve it, such as planning to save $600 by next December to pay for holiday gifts. The goal is realistic if you can afford to set aside $50 per month. If you can’t, adjust the goal or increase your income.
Develop a spending plan to meet the goals. Besides goals, your spending plan must include fixed, variable and occasional expenses.
Pay yourself first. Saving whatever is left usually means not saving at all. Arrange for an automatic deposit or payroll deduction into your savings account.
Eliminate debt. Pay attention to the finance charges you pay monthly on your credit card debt. Instead of paying interest monthly, you could be earning it on savings. If you did not have to make debt payments monthly, you could put that money in savings.
Focus on one thing at a time. When making changes, it is easy to go too far, too fast. Commit to making one or two changes at a time. Stick with them until the change becomes a habit. Then you will be ready to make another one.
Enroll in Georgia CA$H program (Consumers Acquiring Saving Habits). It is sponsored by UGA Cooperative Extension. It is FREE. A quarterly newsletter will help motivate you to establishing saving habits. Call for an enrollment form.
Questions??? Call me in Columbus at 706.653.4200.
By Joanne Cavis