Look, I know it’s summer. We’re all thinking about BBQs, the beach and what we’re going to do for the next long weekend. But what if I told you a little bit of planning now could make the holiday season in December much easier on you? That snapped you out of your summer coma. Whatever December brings your way, it’s usually an expensive month. We all know it, but somehow it always manages to sneak up on me. Travel expenses, presents, winter tires for the car or the hottest new toy for the kids – it really adds up. Do your part now to ensure December is a little easier on your wallet so you can sit a little softer when the season finally comes. Spend your time with family instead of worrying about money or taking a second job hauling Santa’s sleigh. Automate: This is the best and easiest way to do it. Automate a few payments to make December as easy as possible on yourself. Once per month, I automatically deduct $65 from my checking account. It gets put into a bank account marked “December”. After 12 months ($65 x 12), I’m left
Sometimes as a smart spender, you need to decide when to be a smart saver. So here’s a tip that could save you $100 in under 10 minutes… and you don’t even need to do a thing! Sound too good to be true? Keep reading to find out what we mean and you’ll be able to save as much as you want. When you’re looking to cut your costs, it’s important to decide between needs and wants. For things that you actually need, you will have to adjust your budget accordingly. But in the famous words of the Rolling Stones ‘You can’t always get what you want’. For me, my spending gets out of control when I stop really thinking about what I want (and even convincing myself it’s something that I need). Let’s look at three things I want to get over the next two months, and see where I can make some cuts. (For the sake of explaining here, let’s assume they all cost $100 exactly). - 16GB photo card for my camera - Renew 3 magazine subscriptions - Concert tickets to a show in June When I actually
Here’s a tip that works well with one-off purchases coming up. If you’ve been reading this blog for a while, I’m sure you’re a Smart Spender, with a balanced budget and tons of compliments on how good looking you are. Beyond that, I’m sure you’ve trimmed up your budget and cut out all the unnecessary pieces. That doesn’t mean you’re finished! Since you’ve been so great at cutting out the costs in your life, it’s time to think about earning some extra bucks. Now, I’m not saying you should go out and start working 22 hours/day, 8 days/week, but if you’re really saving up for something, it can be worth it to take on some extra tasks. Let’s pretend that you’ve got a great summer planned. You want to spend one or two weekends away, you’ll have some ‘stay-cations’ to cut costs, and you’re even on track to make all your bill payments. Then, out of nowhere, some friends call you up to invite you to a great music festival. The problem is, that’s $150 you don’t currently have – and
OK – it’s time to get psychological here, and no, there won’t be a test! We’re going to talk about the effects ‘sunk costs’ can have on your finances. A sunk cost is money that you’ve put towards something you can’t get back. Whether it’s a non-refundable purchase (sale items), a phone or a deposit on a vacation rental, it’s spent money – regardless of what you do afterwards. Sunk costs can get dangerous when you need to spend more just to get value out of what you’ve already spent. For example: You spend $200 on a set of golf clubs, and go to the driving range (another $10). You’re no good, so you get two lessons ($45 each). Let’s say you did all that and it turns out you still don’t even like golfing! That was $255 of your hard earned money! Rather than ‘waste’ the money you already spent, you hit the range some more and schedule some tee-times – continually spending cash to ‘recoup the value’ from your original spend. Do you see the problem here? If you spend $A, but need to spend $B to get enough value
If you’ve got some little spenders running around the house, it might be time to start teaching them a little about saving and responsibility with cash. A little work while they’re young can go a long way towards encouraging solid spending habits and a lifetime of benefits. When you ask around with your friends about when they started having their own bank account, you can bet that those who are better with their cash now, had a good early start. Getting the jump on personal finances can start with a quick ten minutes. I would recommend front-loading the financial experience with a little bit of work. Whether you’ve got an extra project around the house, a neighbor who needs some help or just some house cleaning you’ve been putting off for a while, it’s great to show kids how they can earn money through hard work (great concept, right?). Work out a deal with your child that they can keep half of the money to spend on something fun, while the other half goes into their first bank account. This will sound impossibly grown up to them, and the responsibility of it will feel awesome.