Five Tips to Get Personal Spending Under Control in the New Year
A new year usually means new resolutions; an opportunity to improve on things such as personal fitness and diet. Studies say that a goal that nearly one-third of adults have going into a new twelve months is to get their personal spending under control. Below are five ways that anyone – even the biggest spenders – can make better financial decisions in 2019 and beyond.
Set Attainable Goals
If personal spending hasn’t been managed in the past, attempting to save a significant amount of money isn’t realistic. If you’ve never budgeted or tried to save money, setting a goal to save a small amount at first will help to keep expectations in check.
Learning to live without the extras (eating at restaurants, expanded cable plans, etc.) might be necessary until a debt is paid down. By eliminating excess spending, staying on track with any budget will be more manageable.
It’s difficult to begin budgeting without knowing exactly where you’re spending your money. Mortgage/rent payments should be around 28% of your gross monthly income; car expenses (loans, gas, and repairs) should be about half of that.
That leaves you with a little over half of your monthly income for “everything else,” – daily living expenses, cell phone bills, unexpected expenses, entertainment, and food. If cutting costs on any of the above are an option, explore those options. This means reducing unnecessary driving, dining at restaurants or even lowering your cell phone plan.
Look to Personal Loans for Help
Consolidating debt isn’t for everyone, but for some, it’s a great way to start the process of taking control of finances. There are companies, like SkyCap Financial, that offer personal loans up to $10,000 and have a stress-free application process.
When searching for a personal loan, it’s important to find a lender that will directly deduct the funds from your bank account so that additional debt or fees aren’t accrued.
Do Not Use Plastic
In this day and age, everyone uses credit cards. Heading into the new year, toss the credit and debit cards and spend only cash for one month. Christmastime and the holidays are often the worst times to try this, making the New Year a perfect opportunity for change.
Limit yourself to a certain amount each week, withdraw that amount from the bank and commit to only spending the cash in hand. Research has proven that swiping a card reduces thought process and is literally mindless work. Cash diets are a great way to control spending and increase money mindfulness.