No, you don’t have to live like a pauper if you want to make ends meet and get ahead financially, but you do have to have a plan. One of the biggest pieces to the puzzle of financial health is deciding to significantly reduce or eliminate unplanned spending. It is often those little expenses, such as $5.00 on fast food, or $50.00 on that tool or new shoes that eat away at family budgets and family goals of getting ahead.
To eliminate unplanned spending you must first come up with a plan. What are your financial goals? Are you saving for retirement, college or a family vacation? Are you working to reduce your debt load or build your credit score? Whatever your goal you will need to decide on a regular amount that you can contribute to the savings account that will help make your goal a reality. Once you have earmarked your earnings for a higher purpose it can feel a little easier to pack your lunch and pass up the corner pizzeria at lunch time.
Still having a hard time saying on track? Look for patterns. What are the triggers that send you into a spending frenzy? You may find that you can head off the next episode by understanding what drove you to spend outside of your budget the last time. If it helps include a little mad money in your budget each month and look for creative ways to make your money do more. For example, big shoppers can save and stay on budget by exploring consignment and thrift store deals. Foodies can join co-ops, which offer significant savings on everything you need to bring a gourmet touch to the table. No need to go out, by a cookbook and experiment with the recipes you enjoy at your favorite restaurants for only a fraction of the cost. Who knows? You may even stumble on a side or second career as a caterer.
Don’t forget to enlist family and friends for support. It can be especially tempting to blow your budget when a friend invites you to lunch at that new restaurant or insists you come along to enroll for a class at the community center-but be firm. Tell your friends what you are working toward and ask for help. Instead of going out for a movie, why not rent one and enjoy a potluck meal? Or, the next time your son or daughter asks for the latest or greatest new game (or whatever) why not encourage him or her to save the money from allowance, look for ways to earn extra money around the neighborhood, or match the cash they have on hand dollar for dollar.
Eliminating unplanned spending can give you the financial freedom to make choices that are impossible when your spending is out of control. For instance, you may be able to pay off your home sooner, vacation better or retire earlier. Remember, it isn’t always how much money you have that determines what you can do, but how well you use it. Spend wisely.