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Culture June 4, 2018
Cha-Ching!
Worried about your impulsive spending or just want to learn more ways to save up for that vacation you’ve always wanted to take? Here are quick and easy ways to achieve better money habits.
Whether you’re making minimum wage or a six-figure salary, it’s crucial to learn how to properly manage your hard-earned cash. Healthy spending and good saving habits are essential to creating a comfortable financially life. Trust us.
Experts at TIAA believe you should be saving at least 20 percent of your paycheck or monthly salary. To break it down, 10-15 percent should go to your retirement fund and the remaining 5 percent should go into a savings account for emergencies and everything else.
While it’s no fun to only technically receive a portion of your paycheck, you will thank yourself in the long run. You’ll be able to buy that car, that house or take that trip you want if you save accordingly.
One day, this could be YOU swimming in money!
In order to master better money habits, you have to know what you want. Set personal and financial goals to keep you on track. Know exactly what you are chasing in the short and long run to help keep you focused on the prize.
Start planning! TIME Money explains that you should never buy something impulsively. Your purchases should all be planned in order to help you minimize the risk of overspending. Planning also allows you to save up the funds in order to make sure you’ll be able to afford it.
Life Hack suggests creating a budget, but also making it realistic. Creating a budget doesn’t mean saving $50.49 on gas every four days, $30.45 on groceries from Trader Joe’s, etc. Setting very detailed budgets is only going to cause stress if you happen to slip up.
Make a budget that is short and sweet. Know you will allot X amount of money to groceries, gas, etc. per week. In addition, know your mandatory monthly payments, including rent/mortgage, utilities, phone, etc.
But most importantly, make sure you’re creating an attainable and flexible budget! Don’t knock yourself down if you’ve overspent by $5.
Bring out your inner Gordon Ramsay!
Eating in is one of the best ways to save money. Whether you live in the city or the suburbs, it’s so tempting to order in or go out to eat after a long day when all you want to do is relax. But since you’re likely already buying a weekly supply of groceries, might as well use them!
While you’re at it, you might even find a new passion you didn’t know existed.
(If you really must go out, USA Today suggests taking advantage of lunch deals and happy hours, which are often much cheaper than dinner prices.)
In today’s technological society, it’s incredibly easy to scan your phone or swipe your card when making a purchase to expedite the process. But, studies show you will be more conscious of your spending if you use cash.
“Rather than blindly using your credit card and deferring whether it’s worth it or not until your bill comes — by that time, it’s too late — using cash forces you to make that decision when you pay,” writes Ramit Sethi, author of “I Will Teach You to Be Rich.” “You withdraw a limited amount and watch it dwindle. It’s very primal: Since we’re more motivated by loss than by gain, each dollar you physically spend will cause you pain: the good kind of pain.”
Kathleen Elkins, Business Insider author, tried Sethi’s principles and tested the “cash-only diet” for two weeks. After budgeting $500 per month, her weekly spending was limited to $125. This was her way of switching to practicing better money habits.
This may be scary to think about if you are in your twenties and getting settled into your first career, but retirement is something you always have to consider, according to Forbes. One way to create better money habits is to learn about retirement programs early. Understand the rate of returns your company or retirement plan offers.
“Unfortunately the later you start saving, the more you’ll have to save,” explains Forbes. “But the sooner you sock money away, the more time it has to compound and grow.”
You’ll thank yourself when you’re 65, relaxing in your dream home.
Lastly, this may sound obvious, but know how much money is coming in and how much is being spent.
According to TIME Money, you should be spending less per month than you are earning. Again, this may sound obvious, but letting your bills pile on your credit card is a serious temptation. The idea of buy now, pay later is risky and, if not managed well, people can end up with lots of debt.
At the end of the day, remember it’s all about balance. It’s okay to treat yourself sometimes, but don’t go crazy. It’s excellent to save, but don’t save so much you won’t have enough money for the month.
If you’re wise enough with your money and successful, one day, someone else might manage your money for you.
