New Year…New You…Financially Speaking
Happy New Year!
At the end of the year, most people are thinking of their New Year’s resolutions.
What about you? Are you thinking of becoming debt free next year? Maybe you simply want to commit to start becoming debt free? Or maybe your goal is to get a better handle on your money. Any of the above are possible with a plan.
How do you get started? It’s a simple process, but it will take discipline.
1. Commit to a monthly budget
This is a biggie. You cannot win with money if you don’t use a budget. John Maxwell says “a budget is telling your money where to go instead of wondering where it went.” It’s the monthly road map that serves as the out of bounds marker on your financial journey.
A budget is not designed to be a hindrance, but instead is meant to be a guide.
In order for it to work, however it has to fit the month! A budget is not designed to be the same every month. If there are birthday parties that will require money for gifts, put it in the budget! If you need to increase the food budget because the kids will be home for winter break (and therefore eat everything in sight), by all means increase the amount of money budgeted for food. Planning a weekend getaway? Put money in the budget for all areas of the trip.
But here’s the important part…if you increase one area of the budget, you will have to decrease another area of the budget! If you increase the food budget, then you'll need to decrease the amount going to savings or debt reduction (or another category) that month. The only way to make this work is to budget each and every penny that comes into your account...no more, no less. So if you increase one area, you have to decrease the other. It’s the only way.
Keith and I choose to use online budgeting. It has been a lifesaver for us and I can honestly say it is probably the only reason we have made as much traction on our debt. Check out what we use here. I promise you it will change how you look at budgeting.
2. Lower the amount of money you spend eating out
I know you really don’t want to hear this, but it will be key to you achieving your financial goals. You don’t have to give up eating out altogether, but I am certain a large part of your disposable income is currently spent on eating out. Spending less on eating out will free up more money than you can imagine.
Even if you choose to continue to eat out, your financial goals will benefit from a few changes in how you eat out.
Get water with lemon instead of tea or soda. For a family of four this will easily save $15-$20 per meal out.
If your kids are under 12, choose restaurants that allow kids to eat free on certain days. Eating out on Tuesday in order to shave another $20 off the receipt is worth the midweek trip.
How about this one…eat out on non-peak days for celebrations. Several restaurants offer a 10-20% discount to enjoy Mother’s Day dinner on Friday or Saturday instead of Sunday. The service is often better, so it becomes a win/win situation. You can also choose to take advantage of happy hour specials. You can get a quality meal at a fraction of the cost just by dining a little earlier.
Regardless of how you end up doing it, being intentional about the amount of money you spend eating out will go a long way to you achieving your financial goals.
3. Plan a "staycation"
This is another sensitive area for some. Spring break, summer vacation, Christmas, Thanksgiving and other times of the year are great opportunities for vacations. Staying a little closer to home will help keep your financial goals in reach.
Here are a few ideas to get you started:
Be a tourist in your own city.
Take a day trip each day a few hours away from home.
Volunteer to assist those with less.
Discover bike and walking trails near you.
Limit gifting. Keith and I have not gifted each other since we started our journey to financial freedom. All of the money we would have spent on gifts has gone to paying off debt. The day will come when may choose to gift again, but in the meantime we want to be out of debt more than we want a shiny new object.
Give homemade gifts. We also have taken to making gifts for family and friends to lower our gift spending. They are labors of love and have meant more to many of our family members than we ever thought. Neither of us consider ourselves to be crafty, but we’ve found our way to some pretty cool creations.
4. Don’t give up
I could give you at least five more ideas to help you with your financial goals for next year but none of them will matter if you don’t follow through. Please don’t quit. If you find yourself getting discouraged, reach out. It doesn’t have to be me, but to anyone who will encourage you to hang in there.
A goal this important will have setbacks. You have to keep going.
James 1:2-3 tells us to “consider it pure joy, my brothers and sisters, whenever you face trials of many kinds because you know that testing of your faith produces perseverance. But it goes on to say in James 1:12 “blessed is the one who perseveres under trial because, having stood the test, that person will receive the crown of life that the Lord has promised to those who love him.”
