It’s never too late to learn budgeting skills to put yourself in a good financial position. The new year is the perfect time to hit ‘reset’ and think proactively about your money. Money matters always seem to be an intimidating avenue to approach but that no longer has to be the case. Here are some actionable budgeting tips for the new year that you can start implementing today.
Automate reoccurring bills to ensure that you’re not missing payments
One of the easiest ways to stay on top of your finances is to make sure that your bills are paid on time. By automating payments through your bank, you reduce the risk of forgetting. Most institutions (such as your credit card company) will penalize you for late payment by hitting you with interest fees. A few dollars here and there spread out across all your accounts certainly adds up.
By now, most (if not all) service providers have the capability of setting you up on direct debit. I’m a big fan of the “set it and forget it method”.
Go through your bank statements monthly
Make it a point to review your bank statements on a monthly basis and look for suspicious charges. While it doesn’t happen often, sometimes companies accidentally double charge you for services. I once paid for a coffee using ApplePay on my phone and was told the payment “didn’t go through”. I was asked to insert my card and key in my details as normal. Later on, I checked my bank account and realized I had been charged twice.
In this instance, the damage was only a few dollars but it can certainly happen on a larger scale. This is a common occurrence with credit cards. With most spending so much time online shopping, we run the risk of getting our information compromised.
It’s not unheard of for banking information to land in the wrong hands via the internet. The sooner you spot a mistake on your bank statements, the sooner you can get the issue rectified.
Learn to not spend more money than you have coming in
Before I got a credit card, my biggest fear was spending a whole bunch of money that I wouldn’t be able to pay back. As I have become more financially literate, I understand that credit cards are not a means of supplementing your income. I’m a strong believer in not putting a purchase on your credit card that you cannot afford to pay for in cash.
Your monthly income may fluctuate but you should have a general idea of what is coming in. If you have inconsistent pay, create your budget using the lower end of the spectrum.
Budgeting does not always mean creating an extensive excel spreadsheet and accounting for every penny spent. Having a well-thought-out plan of how your money is going to spend can be quite simple. Doing your research can certainly help you get on track. There are tons of online resources for people looking for actionable budgeting tips for the new year and beyond.
Check up on cancelled subscription services and “free trials”
If you’ve stopped subscription services (Netflix, Spotify, etc.) make sure that the companies stop billing you. It doesn’t hurt to also check the fine print in the agreements to make sure that you’re not bound by any terms. Another major problem is free trials. We all sign up for them to find a way around getting things we don’t want to pay for long term.
The problem with free trials is that we often forget to cancel before it’s too late. The longer the trial (some go for months!) the less likely you are to remember to cancel. This is a big one that often gets overlooked. I’ve been charged one too many times for services that I intended to only use for a short period of time.
The clincher with free trials is that the service is often so pricey that you don’t actually want to extend past the trial. If you must sign up for trials, keep these pointers in mind:
- If possible, avoid entering your credit card information prior to starting the trial. Some services don’t require this during the trial period – you simply lose access once your time is up.
- Set a calendar reminder a few days before the end of the trial, in case cancellation takes time to take effect.
- Start up another trial with your secondary email address. This isn’t me saying you should go create multiple email addresses to mess with the system. No, not at all. Most people have at least two email addresses (we all have that one that junk mail goes to). In the name of saving money, sometimes it’s necessary.
Even if you’re in debt, there is always a way out
If you are looking at this post and thinking to yourself “I’m so far gone”, you’re wrong. It’s never too late to get things right. Getting yourself out of debt might mean tightening up on your spending for some time. The process will take time and it certainly won’t be easy but it is possible. Click here to learn the six-step process that can help you get out of debt.
I will continue to mumble in frustration at the school system for not teaching financial literacy. If you are not fortunate enough to learn money skills at home, you’ll likely learn the hard way. Unless you’re very resourceful and know where to look (like reading this post, for instance).
Learn to enjoy your money and treat yourself in moderation
This article from The Everygirl talks about the misconceptions of overspending. Having your daily or weekly dose of Starbucks is not the epitome of reckless spending. Find your balance and figure out what works for you!
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