3 Secrets to Lasting Money Change
You make enough money. You know you do. But you still feel like half of your paycheck flies out the window every month.
What if you could hold onto more of your money? Strike that. What if you could hold onto more of your money without sacrificing what you love?
You can, and we’ll show you how.
Secrets to Effective Money Change
1. Budget Monthly. Before each month begins, devote 30 minutes to creating your budget. Too busy? Think of it this way: Thirty minutes of your time is less than 0.001% of your month. That’s a thousandth of a percent! You spend more time than that brushing your teeth. Budgeting is just as important.
2. Make Your Budget Equal Zero. So how do you make a budget? Start by plugging in your household income and subtracting your expenses. For example, if your monthly take-home pay is $3,500, spread that across giving, saving and spending. That might be $350 for charity, $300 on debt, $500 on groceries, and so on. Keep budgeting until every dollar is assigned.
Now you should have a budget that equals zero.
$3,500 monthly income - $3,500 planned = 0
If you wind up with extra money, add more to another category. Use the extra money to pay down your debt faster, save for a replacement car, or sock it away for the kids’ colleges. It’s totally up to you. But every dollar must get a name.
If your budget comes up short, you need to do some tweaking. Look at your flexible spending categories like your clothing cash or gift money and reduce them a little.
3. Track Your Expenses. You’ve made your budget. That’s awesome. Because for the next 29 or 30 days, you won’t have to worry about what to spend on groceries, restaurants or clothes. You’ve already planned it out! Now it’s time to start expense tracking.
Here’s what that means: Let’s say you’re craving Italian. You pull up your EveryDollar app (this takes about five seconds) and see that you budgeted $200 for restaurants. Sweet! Little Italy, here you come.
After you’ve cleaned off your pizza pie and you’re waiting for your server to swipe your debit card, grab your iPhone again. This time, update your restaurant budget to reflect what you just spent. And . . . you’re done. Wasn’t that insanely easy?
Be sure you are actually tracking, not just keeping a kinda-sorta running tally of your spending in your head or checking your bank account at the end of the month to see how close you got. When you track, you’ll be spot-on!
Keep More of Your Money
Budgeting doesn’t have to be complicated. It’s as simple as making a plan before the month begins and devoting a few seconds to track your plan as you use it.
After a few months of budgeting, you’ll be hooked. When every dollar has a name, you can put your money where it matters most to you. That’s long-lasting money change.