Financial Freedom Fridays-Mike’s Tips
|May 20, 2011||Posted by Jessie under Financial Freedom Fridays|
Happy Friday! I enlisted Mike to give you all some money advice today, so listen up…he’s good:)
5 Money Saving Tips
We are big believers of Dave Ramsay, like we have mentioned before and think that he helps a lot of people look at money a different way. Some of his principles are the common sense principles that our grandparents did to get by when times got tough. He has a way of saying things that helps people quit digging the holes that they are in and jump out. And, if you are not in a hole, he shows you how you can grow even more. These are a few of the areas that we have found to be helpful in controlling our money to get to a place where we don’t have to worry about things. We are not there yet, but are doing what we can and have made a lot of progress in a relatively short period of time. It is working for us and I hope this helps.
1. Track your spending- Its hard to know where and how to save money if you don’t know where it is going in the first place. Just track your spending for a few months and try and get some trends on the ways in which you spend your money. If you are anything like us, there will be a few areas that we really didn’t know how much money we were spending. For example, we genuinely didn’t know how much we were spending on eating out.
2. Designate certain areas to cut back in- Once you know how much money you are spending on things, you can see which areas can be manipulated. Certain things like bills, gas, and the mortgage are areas that really can’t be changed much. You can control things like food and entertainment. I know, you are thinking… we all have to eat. Yes, but there are ways to control the price of what we eat. Cooking more and buying your groceries at certain places will save you a great deal of money right off the top. You will be suprised and maybe even excited about where you can save if you really try.
3. Create a margin- Once you have found a few areas to cut back in, you have created margin. You have more money coming in than you do going out each month. That is the only way to save. You can do that by making more (which we don’t always have control of) or spending less. If you can spend less each month than you make, you will have a surplus of money to do whatever you want with. I would suggest paying down debt and saving for a rainy day, but when you have more money than you need right now, it gives you options that you didn’t have before.
4. Pay down debt- we were talking about this just yesterday. Even if we do get a little extra money one month, until we become debt free, it belongs to someone else. So, our goal over the past few years is to pay off our debt as fast as we can. It can be overwhelming to tackle debt, epecially if the amount you owe can’t be paid off that quickly. It can seem never-ending. If you create a plan and stick with it though, it will work. You will cut away at that debt and one day soon, all the margin you have created will go to you. In short, you can’t save money for yourself until you stop owing money to other people.
5. Pay yourself first- most of our money already has somebody else’s name on it before we even get it. A certain % goes to the mortgage man, the gas company, the TV company, the car payment, ECT…..Why not designate an amount that goes right to you and your savings acount? If you save at the beginning of the month, then you are not wondering if there will be enough at the end of the month to save or not. It will already be done. You have to create a little margin first, but once you do, you can generate a savings that will keep you out of debt and create some financial peace.
I hope you found this helpful! Have a great weekend.