Budgeting Advice | blog.firstffcu.com

Just because February is here doesn’t mean you should already be neglecting to improve your finances. In fact, no matter your resolutions (or if you’ve already abandoned them), it’s always a good idea to work on your finances.

If you’re looking for ways to tweak your budget to better effect this year, then here are some strategies you can follow to spend less and save more:

1. Factor in Infrequent Expenses

One of the biggest pitfalls of budgeting is forgetting about infrequent expenses. Some expenses may only be paid quarterly, or perhaps even once a year. It’s easy to forget to include them in the budget, especially if you create your budget during a month when you’re not making the payment. The fix is easy though.

As you tweak your budget this year, spend the extra bit of time to look ahead for infrequent expenses and include them. Break them down into monthly costs so that they are accounted for. Also ensure that the money is already there when they are withdrawn from your account.

2. Don’t Count on Irregular Income

Many of us like to look ahead and estimate our income. Unfortunately, we often over-estimate what is coming in. We rely on our estimates too heavily whether it’s a bonus at work, a tax refund or some other windfall. Instead of factoring future income into your budget, consider pretending it doesn’t exist. That way, when you do get a windfall, you can bank that instead of spending it. This way, you don’t end up in trouble if the extra money doesn’t appear like you thought it would.

3. Boost Your Savings

You can also use more no matter how much you’re setting aside, so look for ways to boost your savings. Even an extra $15 a week can help in the long run. Consider changing how much is taken from your paycheck and contribute it to your retirement account. You can also put more in your emergency fund. Just make a small tweak to the amount to make a difference down the road.

4. Check into Your Subscriptions

When was the last time you reviewed your subscriptions? Look at where your money is going on a monthly basis. If you aren’t using subscriptions, change things up so you aren’t spending on what you no longer use.

5. Review Your Insurance

Every six months or before renewal, do a quick comparison of your insurance policies. Could you be saving more elsewhere? If it looks like you can get a better quote someplace else, let your insurer know and ask for a match. If you haven’t changed your insurance for a few years, you might be surprised at what’s available and how much a quick search can save you.

6. Sign Up for Cash Back Sites

If you aren’t using a cash back site, now’s a good time to do so. Sign up for Ebates and Swagbucks to get some of your purchase-price back. Between these sites, plus use of a rewards or cash back credit card to pay, you could end up with serious savings overall. Yes, you want to spend less, but you also want to get a little back for the spending you do.

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Article Source: Miranda Marquit for MoneyNing.com

They say it takes about 21 days to create a habit, whether good or bad. Once you start feeding into bad money habits, it can be harder to be financially responsible and become increasingly easier to continue splurging. If you feel your bad money habits are getting you down, don’t worry; there is hope for you.

The first step to changing your ways is to acknowledge that there is a problem. If you are blind to the issues your money habits are causing you, it will take you much longer to get out of your situation. By facing them head on, you will be able to turn your bank account around.

Here are some common bad money habits and ways to fix them:

Eating out multiple times a week. By making simple homemade foods at home, you can save quite a few dollars each month. If you figure that the average meal when dining out is roughly $12 compared to about $4 to $6 when cooking at home, you’ll save roughly $6 per person per meal each month. Even by reducing the amount of times you go out for coffee every month, and making it more at home, you will be able to cut back on frivolous spending. For example, going out for a $2 coffee five times in one month is more than what you could pay for one bag of coffee. $2 may not seem like a lot, but it certainly adds up quickly. Have a hard time giving up your favorite cafe’s cup of Joe? See if you can purchase your own bag of their ground coffee beans to make at home.

Having no financial plans. Not having a plan to save any money is a terrible habit you should break away from immediately. Making changes like paying yourself first, creating an emergency fund, creating a budget, and opening a retirement account are all actions to consider implementing as soon as possible.

Not talking to your significant other. Not discussing the topic of finances with your significant other is a bad idea. Even if you are not married yet, you and your partner should have a general idea of what is going on in your bank accounts, especially if you have plans to move in together. Create a plan and financial goals together and work on being as transparent as possible with one another.

Impulsive buying. It’s hard to not want to dish out money on an item we see and feel we must have right away. But, this kind of impulsive spending on a regular basis is not only harmful to your bank account, but it tends to create negative habits that become harder to avoid even in times of financial struggle. One way to short circuit this process is to only carry cash. People tend be more budget conscious when paying with cash, so you can truly help yourself by paying in cash only.

Carrying a credit card balance. People use credit cards to create a tremendous amount of debt each year. If you have a balance – pay it down to get rid of any looming interest. Train yourself to skip using a credit card for unnecessary purchases or any items you haven’t budgeted for. If you do use your card, make sure to pay off the balance each month.

Don’t forget about First Financial’s free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live.

Ignoring your savings. Some studies suggest that roughly 1/3 of Americans don’t have any money saved for emergencies. Consider cutting the fat out of your budget and automating contributions to your savings and 401k accounts. Contributing to your 401k will improve your tax situation, and building your savings will reduce any financial stress you might be having.

Neglecting to get the best rate. People often overpay for services they don’t use. A great example of this are huge cable bills for hundreds of channels that never get watched. Consider using a comparison website like lowermybills.com to get a sense of how much you should be paying. Once you have this information, you can call your provider to see if they can lower your rate. Or if it’s not being used, cancel your cable all together.

The above are just a few common bad money spending habits, but we know there are more to avoid. How do you feel about your own spending habits and knowledge of financial literacy? To get an idea, take this quiz and find out.

Article Source: Jennifer Clark for Saving Advice, http://www.savingadvice.com/articles/2016/07/20/1041690_bad-money-habits.html