You’re making the money, but where on earth has it been going?

It’s no secret that budgeting is one of the harder things for most people. It’s not crazy to want to spend the money we work hard for, but it is particularly difficult to decide what to spend it on. When you get your paycheck at the end of a long, tiring week it’s normal to want to treat yourself to a fancy dinner, your favorite gourmet iced coffee, but is it really better in the long run? This is a question I ask myself every time I put money into my account: What should this money go towards? 

A simple way to answer this question is to break down your payments, your bills, your weekly spending money, any extra money you might need that week, kids’ lunch money, anything that deserves its own pile. One way of doing this is to print out your bank and credit card statements, going through all your expenses and rate them as need, want or wish. Prioritize your expenses. What are your true needs, which could be classified as wishes, and things that you just simply want. Finding cheaper alternatives to everyday things such as cable and internet. 

Going with your credit card, move all credit card balances to 0% cards instead of paying interest on every transaction. Do the money math and see if the current interest you’re paying is more than the one time transaction interest. Check out all balances and bills going into your credit card, student loans, mortgages, refinancing is key!

On top of credit cards, think about the future money, the retirement plans. Check your tax withholding amounts, why wait until April to get a large tax refund when you could be using that extra cash every month? This is for people who typically get a tax refund every year who might be withholding too much. Being tax efficient will only help you in the long run, especially in your retirement plan funding. Lower tax withholding and put more money in your cash flow. 

Save your money where you can girl!! Cancel those unused gym memberships, there’s tons of FREE YouTube home workout videos out there. Two important keys of budgeting are consistency and boundaries. Keep money separate from your checking account, not money to tap into when you are in need, and do it every time you get paid to build confidence, trust and your net worth! 

Another thing I do is a monthly spending cleanse. I look into my monthly expenses and pick out one item you won’t spend as much money on, it could be anywhere from eating out to getting your nails done. Then, every time you would normally do that activity, move it into a separate bank account and save up! Over the course of a year, the typical person saves an extra $1,200 to $1,500 a year, just think about how many nail sets you can get after a few years of that type of saving!

Tracking your time and expenses will get you further than anything else! It’s all about relying on yourself and your ability to set goals and decipher between necessities and wishes. Where you spend your time is where you spend your money, so spend it right! Make sure you have a place to put the extra money you find in your cash flow, too. Most people will earn more to spend more, but you can be proactive and strip out the extra money every time you get paid. 

There’s so many ways for us to make money, so there have to be double as many ways to save it, and that’s what I hope to help you be able to do! Feeling comfortable with our money is a crucial part of budgeting and saving up, and these tips are just the beginning! Make it work for you, and more importantly, make it fun and realistic for your life!