5 Ways You Can Master Your Money in 2021
When it comes to managing personal finances, many people struggle. But there is a better way. Personal finance doesn’t have to be a point of contention in your house. We have five tips for you to implement today, to impact your finances as soon as tomorrow!
1. Create a budget
We say it constantly here at FFL, but a budget is the most important component to your success in financial health. A budget is a written plan, to tell your money what to do and where to go. A budget allows your money to work for you, instead of against you. Simply put, your budget is just income minus expenses, and it should equal zero, when done correctly. You can find more details on creating a budget in several of our posts. You can also start here with our free budgeting tool.
2. Shop with a list.
This one sounds simple, and it really is! But so many people don’t use it. Going grocery shopping with a list is the easiest way to shop – it ensures you don’t buy things you don’t need, or buy too much of something. It also ensures you don’t forget anything on your trip to the store, as multiple trips to the store could result in more money spent than intended.
3. Stop using credit cards.
A big mistake many people make in their finances is spending too much on their rewards credit cards. In fact, many people use credit to buy things they don’t need with money they don’t have, and often to purchase things they can’t afford. The average American has about $6,200 in credit card debt, according to a recent post by Value Penguin. Instead of putting that next big purchase on your credit card and paying it off later, leave the credit card at home. Save a little every month for that purchase instead of putting it on credit.
In addition, there is a mental correlation between using credit cards and overspending. Often times, spending on a credit card instead of debit or cash, has the tendency to make people think they aren’t actually spending their own money. Stopping using credit cards overall will prevent that mindset from taking over.
4. Cook at home.
Switching from eating out to buying from the grocery store and cooking at home can save a ton of money. On average, a meal costs about $10-$12 per meal. Multiply that by the number of times you may eat out per week, and it adds up very quickly. At $12 per meal, six times a week, that’s $72 per week, $312 per month, and $3744 per year. Instead, switch to cooking at home. Even a simple meal like pasta can be done at home for less than $2 per serving (box of pasta at 0.99, sauce at 1.99, and ground beef 3.77). Add that up to other meals you can cook at home, and the savings will start adding up really quickly!
5. Cut the extras.
Many people often have struggles financially without realizing the extra expenses they have incurred. Instead of keeping these extras in the budget, you can evaluate what you truly need and don’t need and find yourself saving a few extra dollars each paycheck. Things like streaming services, gym memberships, etc. can start to tally up. A basic Hulu membership, for instance, is 5.99, but a premium membership can go all the way up to $70.99 per month. Cutting back to a basic membership, or even cutting it out altogether can really save some extra cash each month. A gym membership, although beneficial, often runs at least $20 per month. Many workouts can be done from the comfort of your home, without any weights too! Free videos can be found online. Some employers even offer gym benefits as a part of their perks. If you’re creative, there are a lot of different ways to save money while not cutting out the things you want to have.
Overall, finding success in personal finance is not impossible. It takes time, effort, and discipline to make it work. But if you start with these simple tips, you are one step closer to that success!