You Did WHAT With Your Money?
Ah, the season of caring and sharing, and buying and flying is upon us. Although the majority of holiday memories include spending valuable time with friends and family, there are also those memories of rushing around, throwing money away trying to make everyone happy or get that perfect gift. No one needs that added stress. If you have people in your life that never seem to worry about Christmas gifts or the holidays, it’s really no big secret, the key is time and money management.
Time and money go hand in hand when it comes to making things happen. They are both resources that run out. There are only so many hours in each day, and there is only so much money you can spend out of what you make. If money, or lack of it, has been a source of stress for you this year, vow to make next year different by deciding to be a better money manager. Here are some tips to help you do just that.
Get a Written Plan
The first thing you can do before you can make any progress in money management is get on a budget, a written budget. Financial adviser and expert Dave Ramsey, says to give each dollar its own mission. It is a super simple concept when looking at it; however, in a culture so focused on acquiring things we can’t afford, this concept is often lost. In order to get your finances under control, that’s really all you have to do. Remember that you are in control. Money doesn’t spend itself. When you sit down before the beginning of each month, write down your projected income and subtract each item you will need to spend money on, you will see that the money only does what you tell it to do. You must prioritize. For example, don’t budget for new clothes if you haven’t budgeted for the electric bill. Put your necessities first, and only spend money on “wants” if you can afford it. Audrey Miller, of Northeast Mississippi, suggests the Every Dollar app for budgeting so that you can have access to it on your phone anytime. Also, write down your financial goals. Meeting them will be much easier if they are clearly written somewhere for reference. Celebrate as you meet your goals.
Put Money into Savings
This one gets complaints because, let’s face it, sometimes it can be hard knowing you have money sitting somewhere and you’re not doing anything with it. Contrary to the excitement of spending the almighty dollar, there can be excitement in knowing you are okay in the event of an emergency when you have some money in savings. Getting a loan or putting something on a credit card seems like an easy enough task, but honestly, it’s better to take care of the problem with cash and be done with it. Unexpected medical costs, car repairs, or appliance problems, any of these could be classified as a surprise expense that you can easily prepare for by having that savings built up. Do you get paid biweekly? Once you get on your written budget, you will use two checks each month to pay your expenses. Since there are 52 weeks in a year, meaning 26 pay periods, there will be two extra paydays that you won’t be considering in your monthly budget. That is the perfect opportunity to put some money in savings.
Cindy Hale, of Tupelo, says she and her husband use the two extra paydays to go towards vacation and Christmas. Not a bad idea!
Work on Climbing out of Debt
Don’t get into the credit card cycle where you spend so much money on minimum payments that you don’t have enough to live on, so you make your payments, then put groceries and bills on a credit card. That cycle will continue until you decide to get out. The only way out is to change the way you manage your money. Starting the written budget and getting a savings plan will get you motivated to get out of debt. Jeff Feist, of Tupelo, says, “Set specific goals. Focus your energy on one primary goal at a time and crush it.” He also says, “The sacrifices you make today are so worth it.”
Plan for Christmas and Birthdays
It’s always interesting to see people stressing about gift buying during the holidays because, guess what, Christmas is always December 25. Every year. What does that mean? It means you can set aside money each paycheck to get ready for Christmas. Most banks have a Christmas Club account, which is a savings account that you put money into, and it collects a little interest. At the beginning of November, a check is mailed to you. That is your Christmas money. Ask a teller at your bank about it, and set it up so that money is transferred each payday. Don’t forget to put it in your budget.
So now you know the big secret to being rich, even on a small income, money management. Out of control spending and disorganization can be like an addiction. It will continue and continue until the person doing it has had enough and decides to change. If you are that addict ready for that change, take a deep breath, sit down, and start on these tips. It’s never too late. For more information and help with money management, go to daveramsey.com.
Rhonda Pate and husband, Jeremy, recently started Dave Ramsey’s Seven Baby Steps, and they are making great progress. Rhonda has also started teaching her 13-year old daughter, Rain, about budgeting.