While it may be true that money cannot buy you happiness… it can make your life a lot easier when used appropriately or exponentially harder if used irresponsibly.
If your financial situation needs a makeover, try these few small changes and watch those dollar signs add up.
- Track your spending
It is so easy to overspend if you have no idea where your money is going. If you’re not paying attention you could be essentially robbing yourself without even being aware of it. If you get to the end of the month and ask yourself “why do I have such a low balance in my account?” That’s a red flag. Your account has sprung a leak, and now it’s up to you to figure out where it’s coming from.
- Start saving NOW not later
We are constantly bombarded by new trends, styles, gadgets, you name it. When we see something appealing, the tendency is to want to buy it thanks to the era of instant gratification. This means that saving usually gets put on the back burner. Word of advice.
DON’T DO IT!
I often hear things like “when I make more money, I’ll save then.”
Right?
WRONGI!
When you make more money, the likelihood of increasing your spending to accommodate your wantsis high if you don’t get into the habit of putting money away now. It is better to put tiny bits of money away now, as opposed to large deposits later.
Why?
Compound interest.
In oversimplified terms – compound interest is basically interest on the interest. Here’s an example.
If you put $1000 into a savings account that pays 10% per year and is compounded annually.
That means that at the end of one year $1000 X 10% = $100.
This $100 is the interest that is credited to the account for that year which gives you a total of $1100.
That means in the following year the account will earn, $1100 X 10% = $110.
After a period of ten years. Your initial $1000 investment will become $2,143.59 which is more than double your original investment.
- Trick yourself into saving
If you struggle with putting money away, try setting up a deposit schedule into an account you don’t regularly use. This can be done in the form of a regular monthly transfer from your primary account to the secondary account. Or you can talk to your employer and see if a portion of your paycheck can be automatically sent to the secondary account. That way if you don’t see it you can pretend like this portion of your check never existed and will hopefully be less tempted to touch it.
- Get in the know
Ignorance is not an excuse for irresponsible spending. If you don’t know… learn. Listen to a money podcast on your way to work, pick up a newspaper and flip to the financial section, or look for free online articles written by finance gurus like Suze Orman, Barbara Corcoran, Neale Godfrey, Ali Velshi, and David Bach to name a few.
What you don’t know CAN hurt you. Not knowing about basic finance opens you up to the possibility of being taken advantage of by lenders, banks, and investors who ultimately have their best interests at heart not yours.
- Bills bills bills
One word.
Automate.
With work, family, errands, and the hundreds of other things we need to keep track of in our busy lives, bills should not be something we even need to think about paying on time. When it comes to automatic bill pay, set it and forget it. Of course, you should always review your bill when it comes in to make sure it’s correct, but you should NEVER use “I forgot” as an excuse to pay a bill late. Late bills mean late fees which means free money to whoever is sending you that bill. It’s money you worked hard for that someone else is taking from you for doing absolutely nothing.
- Be a quitter
Not only is quitting smoking good for your health, it can also be good for your wallet. The cost of smoking goes far beyond the price of a pack of cigarettes. Smoking means higher insurance premiums particularly when it comes to health insurance, life insurance, long-term care insurance and disability insurance. Not to mention the potential medical costs down the road. People who smoke are much more likely to develop heart disease, lung disease and cancer which not only mean pricey medical bills, but an additional financial hit in the form of inability to work.
- Shop it When it Drops
Take advantage of major holiday and seasonal sales to buy everything you need for a fraction of the cost. According to an article published in US News, look out for the following sales.
- Martin Luther King Jr. Day – clothes, linens, towels, home décor, and mattresses
- Presidents Day – mattresses and appliances
- St. Patrick’s Day – Irish-themed jewelry, travel packages to Ireland
- Easter – before and after this holiday look for sales on spring attire, baskets, candy and flowers
- Mother’s Day – jewelry, perfume, and clothing
- Memorial Day – fridges, washers, dryers and other large appliances
- Father’s Day – restaurant gift cards, tools and grills
- Fourth of July – clothing, furniture, and tech
- Amazon Prime Day – usually mid-July
- Tax-free weekends – depends on which state you live in, but in August some states offer tax free weekends on items like clothing and school supplies
- Labor Day – clothing, appliances and mattresses
- Columbus Day – clothing, home goods and mattresses
- Black Friday – TVs, smart home devices, tablets, computers, smart watches, beauty products, and much more
- Cyber Monday – if you missed Black Friday don’t worry, Cyber Monday usually offers repeat deals that were previously offered on Black Friday
- New Year’s Eve – holiday and New Year décor at rock bottom prices
The aforementioned article also mentions the best months to purchase certain items which is summarized in the table below.
| Month | Things to Buy |
| January | Winter clothing. These items are usually discounted to make room for spring fashion items. |
| February | TV’s. Are usually discounted prior to Super Bowl. Jewelry. After Valentine’s Day concludes expect sales on leftover items. |
| March | Ski gear – end of snow season means major discounts. Cruise packages – look for discounts to book ahead for spring and winter break. |
| April | Appliances. Spring formal attire. |
| May | Spring clothing. Large appliances. |
| June | Trips to the Caribbean – there is some risk involved as hurricane season is between June and November, but vacation packages are often priced to sell. |
| July | Tech – look out for Amazon Prime Day. Furniture. |
| August | Summer clothes. Swimwear. School supplies. Laptops. |
| September | Patio furniture. Grills. |
| October | Halloween décor (the closer to Halloween the cheaper items become with best deals after the holiday is over). Older iPhone models. |
| November | Electronics. Beauty. |
| December | Toys. Travel (look out for Travel Tuesday which follows Cyber Monday. You may find great deals on transportation, resorts, and travel packages). |
References
https://money.usnews.com/money/personal-finance/family-finance/articles/the-real-cost-of-smoking
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