How Much Time Do You Have?
On average, new budgeters save $600 by month two and more than $6,000 the first year! Pretty solid return on investment.
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We’re nearing the end of June, and that means two things:
Don’t worry, it happens to the best of us, and there’s plenty of year left—so don’t give up! Try this six-point, six-month checkup to refocus, fine-tune your money game and show your 2018 resolutions who’s boss!
If you’re prone to shopping for entertainment value or lunch with your coworkers has become a daily treat, then it might be time to rein it in. The problem is, sometimes it’s hard to identify our own weak spots. That’s where spending reports come in handy, providing you with an overview of how you’ve spent your cash.
… take note of where your spending failed to support your financial goals, and redirect your dollars, accordingly. Crunch the numbers and consider, “Was lunch hour really worth it?”
Have you been leaning heavily on Rule Three to cover overspending in the same categories, again and again? Do these same expenses feel essential or non-negotiable?
If you budget $100 for fuel each month and consistently overspend by $25, then it might be time to accept the cost of your commute and adjust your budget. Look for ways to trim down other categories so that you can put $125 in your gas tank each month.
This principle applies to true priorities, too. It might not be easy to pad your budget for those bigger, less frequent purchases, but it’s much less stressful than coming up short when your annual expenses roll around. (I’m looking at you, Christmas.)
Budget categories are part art, part science, and they’re always subject to change (because life). Considering the leaks that you identified in Step 1, above, are there any areas of your budget that could use closer monitoring?
Say, for example, you’ve identified that your post-gym smoothie habit has cost you $800, so far, this year. You don’t want to quit smoothies (they’re delicious), so what if you created a ‘Smoothie’ category and limited yourself to $12 per week? You still get to treat yourself twice a week, but in the next six months, you’ll only spend $312! That’s 500 more dollars to put towards your big-picture financial goals thanks to micro-managing your micronutrients.
And, on the flipside, should you eliminate any categories? If you’ve slowly started to ignore your ‘Cleaning Supplies’ category because you nearly always record those purchases under ‘Groceries’, then it’s probably not useful information. Simplifying might make more sense.
Glancing through my own spending reports, today, I noticed a huge spike in my spending for April. It’s no surprise, I moved across state, but it was a good reminder that moving is both expensive and inevitable (if you’re a renter, which I am).
If you spot oddities in your reports, use them to refine your budget. For me, in this case, that means setting a ‘Moving Fund’ goal so that I’m prepared for the next time I relocate.
Now that you’ve got a solid grip on your spending for the first half of the year, it’s a good time to revisit your money goals. Maybe you set out this year to break the paycheck-to-paycheck cycle, and you did! Nice work! In that case, why not take your money game—and retirement—up a few notches with some sound investments?
Or maybe you’re still chipping away at your student loans? It might be motivating to establish mini-goals to make paying down those balances a bit more approachable.
Finally, check in with yourself. Are the financial choices that you’re making today going to positively impact your quality of life for the better? They should.
And can you sustain your current budget without making yourself crazy in the process? It’s true, budgeting is a long-game, but you’ll never make it if you feel overly deprived in the short-term. Make sure to give yourself a little wiggle room if you need it.
We’re only halfway through 2018, so finish it with a bang! Imagine ringing in 2019 with six months of solid financial progress under your belt. Seriously, imagine it. Now walk through these six steps and see how you can up your game!
Remember, budgeting is not restrictive. You won’t be spending less, you’ll be spending right. You can do this! Today. Right now. What do you have to lose? Except all that debt and stress. (Ok, so kind of a lot.)
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