If you are like most Americans, after paying your bills you are left scratching your head wondering where your paycheck disappeared to. In fact over 50% American families have found that they are ” in the red” and have little to no money to put into their savings account. Studies show that the majority of Americans are spending more then they earn.
Here are a few tips to help ” curb” your spending habits and help you save for a rainy day.
Stop charging gas and groceries- although gas stations have made it easier to fill and go with the ability to pay at the pump, and for some time grocery stores accepting credit cards, keep in mind that gas and food will be long gone by the time you get your credit card statement, which may have charges that may be hard to pay in full all at one time. Credit cards and Credit use is a way of life in the U.S.A., and it is difficult if not impossible to rent a car, make hotel reservations, etc., but when misused, your debt can spiral out of control. Even if you can afford to pay off your credit card every month now, what happens if you lose your job, or you suffer health issues that makes it impossible to work for a period of time? Did you know that if you have only $5000.00 in credit card debt, and make only the minimal payment at 18% interest, it will take you 33 years to pay it off?! That sale of 50% off ” BABY PHAT” jeans may end up costing triple its original price, if you include them in a credit card purchase.
Use Cash to Make Purchases – To prevent having to pay the high interest credit card charges, and have some money to put into a savings account, promise yourself that you will only pay for every purchase with cash or a debit card. This forces you to live within your means, you won’t be able to spend what you don’t have. My grandma always told me ” If you cannot afford it today, what makes you think that you can afford it tomorrow?” My grandma had NO debt, she paid for everything in cash, however she did not go without. She simply saved for the more expensive things she wanted or needed and did without some. She was a single mother of my mom and when she passed away she had over $80k in her savings account. I still am amazed on how disciplined she was.
Put ” Blinders” on – Ever have to run out to the store for something and come back with a trunk filled with ” bargains”? I have to admit, I have been guilty of this, but try to make it a habit to just avoid the ” sales” aisles when running a quick errand. It is better to make a shopping list. If you happen upon a sale ask yourself, ” Do I really need this”? Many times, I have had a product in my hand, and put it back, after reasoning that although I really like it, I could live without it for now.
Keep Accurate ATM/ Debit Card Record Shopping – Are you always surprised when you get your checking account statement and just know that the bank has to be wrong? ATM’s and Debit cards although both wonderful ways banking has been made easier, they also make it that much easier to spend more money then you intended. It’s a good idea to make it a habit to ” balance” your checking account after a day of shopping, this way you will realize how much you actually spent. This ” bookkeeping ” will help you not only avoid writing a ” overdraft check”, but will help put some perspective on your spending habits.