Welcome to 31 Days to Organize Your Finances. By the end of the month, my goal is to help you have a detailed financial plan for your family. We’ll talk about cash flow, budgets, debts, and all of the nitty gritty of our finances that might not be fun to talk about, but are so important to discuss. Please refer back to the original post for a complete list of daily assignments.
Did you create your spending plan for next month? If not, what are you waiting for?
Today, I thought I’d give you some of our tips for spending plan success.
But first, I want to tell you that my husband and I are not perfect with our spending plans. We constantly have to work at it and there have been times when we have failed miserably, but every month we continue to plan our spending. Creating a monthly spending plan will not always be easy, but doing so will help you reach your financial goals.
3 Tips for Spending Plan Success
1. Use Cash.
Cash is one of the easiest ways to stay on budget with those categories that are the easiest to overspend, such as groceries, restaurants, and clothes. If you’ve never used cash before, pick one of these categories to start with next month (or challenge yourself to all three) and put the cash in an envelope or safe place once you get paid. Do NOT use the cash for other things–just the categories that you’ve earmarked. When the money is gone, it’s gone, so you’ll need to use strength and determination to pace yourself and not spend it all too quickly.
Every Sunday, I transfer our weekly grocery cash from my envelope into my wallet, so I have it for my shopping trip on Monday afternoon. This way the entire month of cash isn’t in my wallet, just begging to be spent on other things.
2. Refer to your Financial Goals OFTEN.
Why are you doing planning your spending? It’s easy to forget, especially when there are so many outside influences that tempt us. What are your goals? Post your goals in a highly visible space to remind you what they are.
I’ve posted our goals on the bathroom mirror, our bedroom closets, and our refrigerator.
3. Necessities = Priorities
You must determine what is a necessity and what is a want in your spending. We gave up cable TV and our land line to save money. We determined that ESPN and BravoTV are not as important as paying off our non-mortgage debt. But that’s our line in the sand.
I’m not telling you to cancel cable, but I am telling you to reevaluate your priorities and determine what is important and what is a luxury.
What advice do you have to help those who are new to spending plans? Let us know in the comments.
Please note, I AM NOT A FINANCIAL PLANNER. This series was written based on my family’s experiences. If you feel you need additional advice, please consult a certified professional.
#2 and #3 are my favorites and tips I use often. I find that keeping my goals in the front of my mind by reviewing them often keeps me focused and leads to more success in defining needs vs. wants.
Regarding #1, we use credit cards for all of our purchases for the rewards, but I know that the cash only system works well for many.
Thanks for the tips and the encouragement!
Heather recently posted…Trusting Through The Tears