Saving

One Surprisingly Simple Tool to Curb Your Spending

I never really considered myself a spender until I started bringing in a paycheck.

There’s something about having thousands of dollars come in each month and having nothing to show for it at the end of the month that makes you question your commitment to saving money!

But the first step in getting past a bad habit is to address it, and the second step is to do something about it.

Enter: the “Want List,” which I now proudly hang on my refrigerator.

It’s Like a Check Out Cart Without the Pressure

No doubt this idea came from how fun it is to shop on Amazon and make a list of all the things you need or want. Clicking “Add to cart” is incredibly therapeutic… until you scroll down to see the total cost. Instead of keeping this list on Amazon, I decided to put it down on paper. For the past six months, whenever I want to purchase something that costs more than $20, it goes on the list for my husband and I to think about it and decide whether or not it’s important enough to budget for.

Over time, I’ve found that I lose my desire for an item or that it’s not really worth the money, so it comes off the list. Money = saved!

Right now I have two things I’d like to buy: a chlorine-eliminating shower head shower head and a food processor. Both of these items have been on the list for over three months, meaning it’s very likely that I will get and use these items frequently.

The “Want List” Gives You Time to Think It Through

Impulse purchases are murder on your budget. If it gets really bad, sometimes you forget what you’ve bought, leaving you scratching your head when it comes time to assess your savings account. That’s such an awful feeling and it spells disaster for your long-term financial goals.

When you have a “Want List,” though, you are constantly checking in with your desire for an item. It builds up an excitement and desire for it, or quickly shows you that you don’t really want or need it. Either way, you can be more sure that your money will be well spent or well saved. It’s not always about being frugal, it’s about making the most of your money in accordance with your lifestyle.

Do you make a list before you purchase an item? How long does it have to be on the “Want List” before you’re okay with buying it?

5 Easy Things You Can Do To Save An Emergency Fund

save for an emergency fundBuilding an emergency fund is one of the most important financial steps you can make for yourself (or your family).

When you decide on the amount that you want to establish it can feel like a long road before you reach it.

I felt like it took me a long time to build our emergency fund, I wanted that dollar amount in my account but I didn’t have the patience to do it slowly.

I thought if I couldn’t have it all at once in some windfall amount there would be no doing it. I was wrong.

Just Start!

Eventually this is what I did. I just started. Though it didn’t seem like that $20 was going to do anything, within a few weeks that $20 was $100 and I liked that number even more.

I went in with the mentality that if I had enough money for something totally unnecessary, like nail polish or a fancy coffee, I had enough to put in my ER fund account too, if I couldn’t do both I had to pick and ER fund always won.

Delegate Windfall Money

I can’t say I get windfall money often but I did get a few hundred dollars at Christmas time from my boss that I wasn’t expecting.

Since it was unexpected and thus, un-budgeted, I put it all in my savings account for the emergency fund.

The same goes for change in pay. Since I’m paid hourly and not salary, it varies. I do my budget based on an average amount, if there is more, even just $20 I appropriate it to the ER account while I’m building it up.

Sell Something

Though I prefer to just donate things to people in need, sometimes I may have something of value that I can sell.

The only thing I won’t sell and put in my account is if I sell something of my daughters. Since it was something that either we bought for her or someone else bought for her, it wouldn’t be fair of me to sell for my own profit.

I’d put the money in her account instead.

Earn Extra Money

There are a ton of ways to do this from picking up extra shifts at work to earning more through a side-job, of you earn money that isn’t within your regular budget save it until your emergency fund is maximized. Try passive income.

Tax Refund

Though this may go under the windfall money category, if you get a tax refund  good use of it would be to beef up the savings!

Once your emergency fund is at a level you’re comfortable with, delegate any of your extra money towards your next financial priority, whatever that may be but don’t do anything else, additional debt payments and all, until you have a realistic emergency fund in place.

How did you build your emergency fund? How long did it take?

3 Effortless Ways to Prepare Your Finances for Retirement

We’re all moving towards retirement – whether we like to think about it or not. And the truth is that if we are not making deliberate moves to create an awesome retirement for ourselves, we probably will not have one.

Here are three things you can do to prepare for retirement.

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1. Save More than the Minimum

Saving is a key component to preparing for retirement. To help people with this, many companies have started placing money into people’s 401(k) plan. This is cool, but it can give a person the sense that their retirement is being taken care of for them, and that they don’t need to put a lot of effort into it. Don’t make this mistake!

Find out how much your company is putting into your 401(k) – just so you are aware of what is happening with your finances – and then make it a priority to go above and beyond by adding money to your retirement account(s) on your own. That way, when you get to retirement – yippee! – the minimal retirement experience that your employer helped to create for you will be bolstered by your own contributions.

2. Take Advantage of Employer Match (Programs)

Another way that many employers attempt to help their employees prepare for retirement is with employer match programs. With these programs, employers match the contributions of their employees retirement plan deposits, dollar-for-dollar, up to a set point.

This is fantastic because it is essentially free money, given to you as a reward for making good financial decisions, but it can be confusing because different employers have different programs that vary in terms of how much money they are willing to match. Because of this, it is a great idea to meet with someone in your human resources department to learn how your company’s program works. Once you know how it works, take advantage of it.

3. Retire When You Will Get the Most Bang for Your Buck

Just like with company match programs for retirement plans differing from one company to another, the fees that companies charge when an employee retires early varies. Because of this, when you begin to approach retirement, it is a good idea to find out how the finances of  retirement are affected by retiring at different ages.

If you are at an age where you could retire, but would make more money if you continued to work a few more years and are well and can continue to work, it is a great idea to do so, because the fees for retiring early can be substantial.

So hold on and make sure that you do not short change yourself after working so hard for so long.

Retirement is on its way– get excited! But also get financially responsible so that your retirement experience will reflect how well you save more than the minimum, took advantage of your employers’ match program, and strategically chose when to retire.