Divide and Conquer

One of the exciting things we get to do as coaches is talk to our participants about their cash flow. This includes their income and expenses and when they occur in the month, so we can help them plan to save more and pay off debt to make life simpler. 

For many of us, our instinct is to wait until a bill arrives, then pay it from our current paycheck. That often creates a cash poor situation where we don’t have enough cash left over to pay for our other monthly expenses like gas, groceries, toilet paper…without pulling out a credit card. 

Our advice? Simply divide and then conquer your expenses. Open up a couple of sub-savings accounts for bigger bills and automatically transfer money into them from each paycheck.

Setting aside money for those bigger bills will give you peace of mind and a little financial simplicity.

Cutting and Eliminating

It’s surprisingly simple when you want to accomplish a money goal like increasing savings or decreasing debt -- you have two choices: 1) earn more money or 2) reduce what you spend. 

We shared some key ways to cut and eliminate what you spend with our Project Money participants…we'd love to hear what works for you -- post a quick comment on this blog! 

Review your cell phone plan and monthly bill – call your company or visit their website to review alternative options that fit with what you need.

Contact your insurance agent. Make sure you're getting the best deal, then call around to two more companies and get their quotes – compare and save!

Consider cancelling your video subscriptions and determine if selectively ordering them from your cable / satellite provider saves you money. 

Shop smart! Do your grocery shopping with a plan, list (minus those extras), coupons and eco-friendly bags – (some stores give you 5 cents back) -- and no kids. This will help you stay focused on only what you need.

The Best Laid Plans

Taking time to figure out your finances and decide where you want to spend vs.. save is fine and dandy, but are you communicating your plan to others? If not, you might be setting yourself up for failure. 

Get your friends and extended family on board by telling them about your goal to increase your savings and reduce your debt and why you’re doing it. Explain that you’ll be making some different choices when it comes to spending money and that may affect what you've typically done together. 

Here are a few tips for navigating everyday money situations:
1. A co-worker asks you to lunch...suggest you both bring a sack lunch and eat together tomorrow.
2. When friends ask you out to dinner, suggest a potluck at your home.
3. If your mom asks you…“want to go shopping,” get a rain check or make the choice to have fun looking but not buying -- and leave your money at home.
4. Movie night? Make it a movie afternoon at a matinee instead.
5. Invited to yet another birthday party? Instead of a gift, give them a card and homemade coupon for help with a project like weeding the yard, babysitting for a night or housecleaning. 

Get on the Same Page

Many couples have no idea what their spouse is spending on a daily, weekly or monthly basis. Maybe it’s because you separate accounts. Maybe it's because you see it as his/her money -- or because one spouse manages all the money. Either way, it’s time to start talking! 

The first step is to realize that you're in this together. You have joint financial goals you want to achieve, and you both will have to work to change your communication habits. Start by selecting a time to discuss your goals and finances. For example, the Burkes have set aside Monday nights after the kids have gone to bed to review and update their finances.

Become a Planner

Want to find out where you have extra money to allocate to savings or to pay off that credit card? 

Download a copy of this budget worksheet and compare what you’re making versus what you’re spending.

Once you finish, look for changes you can make to decrease your expenses. For example, can you commit to eating out less and include that extra money with your next credit card payment? 

We know, we know, the concept of “budgeting” is boring, but having a reasonable plan in place is the first step to better financial management (and peace of mind). A budget will help you keep track of your spending, identify habits and provide clues about where you might be spending too much.