Believe it or not, we’re just past the halfway mark of the first month of 2019. If you’re still on your New Year, new you kick, but you brought some risky spending habits into 2019, your goals for personal transformation may not pan out the way you’ve planned. It’s as Simple as “Don’t buy what you can’t afford”, right? Well, sort of. The popular idea that living in debt is not only unavoidable, but also acceptable is a very dangerous way to view your finances.
Currently about 227 million Americans hold at least one credit card, each card equipped with a typical $3,000 limit. Having immediate access to funds inspires many to quickly charge their way into debt, transforming credit cards into a holiday bonus, vacation fund, and salary increase all rolled into one instead of their true purpose as a convenient payment tool or instant emergency account.
And it’s not just credit cards that are making it so easy to descend into debt. Payday loan companies have grown exponentially in recent years making debt an easy and convenient process by allowing us to tap into our future earnings just by writing a check. If you are unable to cover your expenses, don’t get a loan—get help. If you plan on changing your financial future for the better, there’s no better time than the present. Here are 3 tips for getting your finances under control:
Track your spending
If you’re feeling the pinch of limited income, tracking your spending habits is crucial. Start by reviewing expenses from the past three months, and look for areas of excess. How often are you buying coffee versus making it at home? Can you cut the cable cord and save? Re-assess necessities, too. Obviously you need groceries, but try trimming your bill with strategies such as choosing store brands over name brands or buying in bulk.
Stop letting eating out eat up your budget
In 2015, Americans spent more money eating in restaurants than they did buying groceries at the supermarket. Eating out often, especially if you’re feeding a family, adds up fast. One great way to save money is to simply eat at home more often. If you’re pressed for time, prepare meals during the weekend and defrost them for quick—and affordable—meals throughout the week.
- Cut the card
If you rely on credit cards to fund day-to-day purchases, STOP; save them for emergencies only. The interest and credit fees can drive up your monthly expenses, keeping you in debt longer. Instead, go old-school and try to exclusively use cash. That way, if an impulse purchase costs more than what’s in your wallet, you won’t be tempted to buy it.
Sometimes it may even seem like the battle is mental when it comes to keep your finances in order. We’ve all heard the old saying, “Change your thinking, change your life”, well we’ve got some solutions for that too. Reverse the trend! Here are some ways that you can work on changing the way you think about debt and spending:
- Get rid of the idea that maintaining debt is inevitable and just another way of managing money. Borrow only when you are absolutely certain you can repay the entire balance when the bill comes in.
- Redefine yourself as a “saver” rather than a “consumer.” Reject the idea that it is your responsibility to keep the economy rolling. It is not. You need to save for (rather than borrow from) tomorrow, so you and your family can be financially independent, prepared and secure.
- Feel good about living within, rather than beyond, your income parameters. Accept that you may not be able to have everything you want (or even need) today, and that a quick cash fix won’t really bail you out of a bad situation; it will just make the following month more difficult.
With an entire year ahead of us, it’s a great opportunity to start new habits that will help, rather than harm, your future self. If you are struggling to find balance with your personal finances, we’re here to help. Florida Credit Union members have access to a wide array of resources to keep you on track.