Good with money

Good with money.. When I would set about being better with my money I would always think in terms of cutting things out. Cutting takeout, less money on clothes, cut the Tim’s run in the morning, those types of things. I’ve come to realize that being good with money doesn’t have to mean cutting fun at all. We’ll talk a lot more about those types of expenses another day because they may need some work, but cutting expenses doesn’t have to be as hard as we make it out to be. Start with cutting the shit that doesn’t really matter to you. Might seem too obvious to be right, but hang with me.

Budgeting and being good with money really comes down to aligning your values and what you want for your life with your money. Making your money support the things that matter to you. If you start with your priorities the rest becomes much easier. Think about what things really matter to you right now. Maybe it’s getting your debt massively reduced, maybe it’s travelling, maybe it’s courses or classes, maybe it’s quality date nights out with your partner at a great restaurant, maybe it is that cup of Tim’s in peace at the beach in the morning after you drop the kids to school. Whatever matters to you and makes your life feel better is what’s important.

With those things in mind, think about how you’re actually spending your money. Every so often, I like to actually tally up what I spent over a month. It is incredibly eye opening. Much easier to trim the fat when you see it. I want to nix the guilt or shame that might creep in at the mere thought of that. This is not about guilt for not doing as well as you feel you should. It’s simply recognizing where you’re starting from. Again, you don’t have to fix all the issues at once. Sustainable growth in financial health, like physical health, is all about giving yourself grace while learning new ways of doing things. No room for beating yourself up here, just realizing where you are and growing from there.

If you’re just getting started looking at making your financial picture better, I find it helpful to start with the fixed stuff like your insurance, phone bills, subscriptions, etc. Spending a couple hours shopping around for insurance could save you tons of money. If you have some money in a savings account, you could increase your deductible on your insurance to save even more. If you have your home and car at different places, maybe bundling them to one place could get you discounts. Ask about discounts! Many insurance companies have group rates for alumni to different universities or colleges, unions, even credit unions. You could be entitled to a rate reduction and not even know it.

Insurance tends to be something that we set up once and stick with, but it really pays to shop around. There’s generally not too much to be gained from sticking with the same company year over year. They may try to dissuade you from leaving by talking about cancellation fees, but I’ve found that those fees are really minimal and don’t even compare to how much you could save in a switch. So ask them to calculate how much the fee will be. A cancellation fee of $10 to cut your monthly cost by $50 is well worth it.

Look at how much you spend on phone/internet/ cable/ netflix and other subscriptions. Once you tally them all up it might scare the socks off you. I chose not to have cable and home phone at all. I have internet and netflix and that more than satisfies our needs for entertainment. Do you really need that massive data package on your cell phone? Or could you do with much less? Do you need to update your phone as often? Or can the phone you’re using last you much longer?

We tend to spend money on phones and cable and all these things without really giving them much thought. We think of these things as necessary, but really they aren’t. Internet has sort of become a need in the world we live in, but the rest is really just wants. Do I want cable more? or do I want to buy more gas so I can do road trips whenever I want? Suddenly that cable really doesn’t mean much to me, especially since there’s nothing I like to watch on it anyway. When you realize that you’re spending all this money for services you barely even use and that you absolutely don’t need to, it’s so obvious to cut them out or cut them back. You’ll wonder why you didn’t do it sooner.

Those are just two lines on a budget that can save a pile. The beauty of working on these fixed expenses first is that you put out some effort now and you get the rewards of that every month to come. You get to spend that money on more meaningful things to you every single month. Big win!

I would love it if you’d actually do the exercise of tallying up what you spent last month. Get a gauge of where your money is going. Then spend a bit of time on just these two lines to start. Even better is if you talk with your friends and family about those two lines. Brainstorm more ways to cut them down. Way more fun than working on this alone. Make it into a competition even, of who can cut the most. Share the joy and fun in making your money work for you. It really does get exciting when you realize how much control you have in where your money goes.

Lots of love

Dawn