It is said that old habits die hard and this can often be used as an excuse not to attempt to break a bad habit. If you're sick of making excuses for not changing your spending habits, sick of not having money for those emergencies that sometimes crop up, sick of worrying about how you're ever going to retire, there is hope. Changing your habits is not easy but it is possible if you truly want to do things differently. Change could, at first, even be a bit painful, but if you stick with it you will soon start to see progress. That progress will then spur you on to greater achievements.
You can take your very first step to change your financial habits right now. Begin by determining where your money goes- every cent of it. Write down every expenditure – even if it's only pennies. Pennies add up to dollars. Once you've kept a written record of your spending, go over it carefully to determine where you can cut back. Don't do it all at once- rather select one or two areas to cut back on. For example, do you make a coffee stop on your way to work in the morning? Rather than stop every day, make up your mind to bring your coffee from home one or two days per week. Put the money you've saved from those days aside. Do you make frequent fast food purchases? If so, eliminate one item from your purchase and put that savings aside. If you do this consistently you'll be pleasantly surprised at how quickly your little savings become bigger.
Next, you can apply these savings to your debts. If you have credit card debt and are only paying the minimum you can take what you've saved by cutting back on daily expenditures and apply it to the credit card. Many people don't realize that credit cards are pretty much the power of compound interest applied against you. You can turn that around and make compound interest work for you. Unpaid credit card debt accumulates interest- that you have to pay. Paying more than the minimum due will help reduce not only the amount of interest you owe but will greatly shorten the amount of time that you will pay. Pay off the card with the biggest balance first. Once that is paid, focus on the next one, using the money you've been paying on the first. Once the cards are paid off, try not to use them unless it's for an emergency.
There are several other relatively easy and painless ways to save. One simple way is to round up when keeping your checkbook ledger. For example lets say you make a purchase of $122.00. Rather than record that purchase as $122.00, record it as $125.00. This means that you now have $3.00 spare "hidden" in your checking account. You'll be amazed at how quickly these little amounts add up to significant savings.
Using coupons is another way to accumulate some extra money. Let's say you have $150 to spend on groceries this week and let's say you have coupons that will save you $8.75. This means that out of the original $150 you had available you have actually spent $141.25. Set the savings of $8.75 aside.
With a little creative thinking and some good old-fashioned determination you'll be able to think of other fairly painless ways to save up some money. Even if it is only small amounts, remember that it adds up over time. The key is time and consistency.
Carly Lance loves to blog about personal finances whenever she can. She also is employed as the blog and marketing manager at Personal Bankruptcy Canada, a company that deals with people going through bankruptcy in Canada. Make sure to check out PBC’s personal finance and bankruptcy blog for more tips on money in everyday life.
You can take your very first step to change your financial habits right now. Begin by determining where your money goes- every cent of it. Write down every expenditure – even if it's only pennies. Pennies add up to dollars. Once you've kept a written record of your spending, go over it carefully to determine where you can cut back. Don't do it all at once- rather select one or two areas to cut back on. For example, do you make a coffee stop on your way to work in the morning? Rather than stop every day, make up your mind to bring your coffee from home one or two days per week. Put the money you've saved from those days aside. Do you make frequent fast food purchases? If so, eliminate one item from your purchase and put that savings aside. If you do this consistently you'll be pleasantly surprised at how quickly your little savings become bigger.
Next, you can apply these savings to your debts. If you have credit card debt and are only paying the minimum you can take what you've saved by cutting back on daily expenditures and apply it to the credit card. Many people don't realize that credit cards are pretty much the power of compound interest applied against you. You can turn that around and make compound interest work for you. Unpaid credit card debt accumulates interest- that you have to pay. Paying more than the minimum due will help reduce not only the amount of interest you owe but will greatly shorten the amount of time that you will pay. Pay off the card with the biggest balance first. Once that is paid, focus on the next one, using the money you've been paying on the first. Once the cards are paid off, try not to use them unless it's for an emergency.
There are several other relatively easy and painless ways to save. One simple way is to round up when keeping your checkbook ledger. For example lets say you make a purchase of $122.00. Rather than record that purchase as $122.00, record it as $125.00. This means that you now have $3.00 spare "hidden" in your checking account. You'll be amazed at how quickly these little amounts add up to significant savings.
Using coupons is another way to accumulate some extra money. Let's say you have $150 to spend on groceries this week and let's say you have coupons that will save you $8.75. This means that out of the original $150 you had available you have actually spent $141.25. Set the savings of $8.75 aside.
With a little creative thinking and some good old-fashioned determination you'll be able to think of other fairly painless ways to save up some money. Even if it is only small amounts, remember that it adds up over time. The key is time and consistency.
Carly Lance loves to blog about personal finances whenever she can. She also is employed as the blog and marketing manager at Personal Bankruptcy Canada, a company that deals with people going through bankruptcy in Canada. Make sure to check out PBC’s personal finance and bankruptcy blog for more tips on money in everyday life.
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