Keeping you in the black in 2018
We’re three weeks into the new year, and like many folks, you probably went overboard with Christmas spending and then also got hit with some seasonal bills to boot. The start of the new year is the perfect time to analyze last year’s spending habits and retool the budget for maximum success.
Write it down!
Keep a ledger of all your spending. Keep track of every penny and ask for receipts so you don’t forget something. Also try to have ZERO days, where you spent NOTHING! Try to make a game of beating the number of ZERO days from one week to the next, and one month to the next. This will both help to motivate you and curb your finances at the same time. I use a spiral bound notebook, purchased on sale at Wal-Mart for 50¢ ! If you notice that you are spending a high amount of money eating out, or on non-essentials, resolve to cut back in that category.
Make a list of regularly occurring monthly charges such as rent, utilities, and credit cards, and keep a record of their respective due dates. This will allow you to plan these payments according to your pay dates. Never spend more money than you earn!
If you have high heating bills in the winter, contact your utility company and ask to be put on a budget plan. Then you’ll have 12 equal monthly bills each reflecting 1/12 of your total annual estimated consumption, instead of low bills in Summer and high bills in Winter. Trust me, it’s much easier to stick to a budget this way.
Clean out the pantry!
If you’ve stocked up the larder with an impressive amount of groceries, resolve to use these groceries over the coming months. You don’t want to have food go out of code in the back of the cupboard because you felt like ordering take-out for the tenth time this month. Spoiled food is wasted money! A home-cooked meal made from scratch with assorted food-stuffs will stretch your pay-check and increase your ability to save even more money! Always keep track of what’s in the house, and don’t buy groceries you don’t need. Take a list of what you need with you to the store, stick to the list, and buy it on sale, with coupons if at all possible. Also, be sure to avoid the impulse-buy traps the stores lay out for you when you shop.
Clear the queue!
If you have been using credit cards correctly and are reaping the benefits of reward points, then you are already in the habit of paying your entire balance in full each month. That’s excellent, BUT there is usually a two to three week gap between the statement closing date, the invoice mailing date and the monthly due date. If you’re using your cards every day, you run the risk of overcharging and blowing your budget the following month. Let’s assume your VISA cards closing date is January 15th. and about 5 days later, you receive the bill in the mail on January 20th, with a due date of February 2nd. This bill will have all your charges from December 16th 2017 through January 15th 2018. Let’s say the balance is $1136 on the statement. This will NOT reflect the $30 gas you charged on 1/16, the $235 in groceries you charged on 1/18 and the $17 at the fast food place you stopped at on the way home on 1/20 before you even got home to see the visa bill waiting in your mailbox. So even though you immediately write a check to cover the $1136 on the VISA bill, you technically are still in debt $282 in new charges not reflected on the current statement which will appear on your NEXT statement.
What you need to do is go on a credit card ‘diet’ and clear the queue of future charges posted to future statements. First resolve to go ‘cash only’ for a thirty-to-sixty day period. This will allow you to zero out your balances, and get back to spending as you go, verses carrying interest-free debt on a grace period. This may be hard if you have automatic recurring payments scheduled, but the trick there is to send a ‘double payment’ the one month.
Trust me, you don’t want to be carrying a ‘grace period’ balance, fully expecting to pay it in full next month, only to have an unexpected life event zap your ability to do so. No one plans to get fired, become incapacitated by illness, or suddenly face an unexpected car repair job. Life happens. A wise man expects the unexpected and plans accordingly . As always I wish you happiness and success!