Wednesday, January 03, 2018
Kick off the new year with a fresh start to spending
Experiencing a holiday spending hangover?
“Maybe you weren’t as prepared as you could have been for the holidays, but that’s OK,” says Tammy Wood, relationship development specialist at Dupaco Community Credit Union’s Pennsylvania branch in Dubuque, Iowa. “Now, how do you get that spending back on track?”
Committing to a frugal month, where you strip your spending to the bare basics, will allow you to find your spending baseline—and maybe even help you rediscover your priorities in life.
“January would be a great time for a frugal month,” Wood says.
Here’s what you should know before you get started:
Track your spending.
Keep a notepad with you at all times, and record everything you spend money on. Pay a bill—write it down. Turn on the lights—record it. Go to the grocery store—add it to the notebook.
“You’re probably spending more on things than you realize,” Wood says. “As you write it down, it will bring to light just how much you’re spending.”
Be kind to yourself.
As you keep track of your spending, resist the temptation to judge yourself for overspending in the past, Wood says. Instead, look ahead and stay positive about your budget challenge.
“It’s going to feel like a long time. But it’s only a month. Think of it as a fun challenge,” she says. “There could be things that come from a frugal month that could save you for years to come because you didn’t realize you were spending on things you didn’t even enjoy or use anymore.”
Determine where you can cut costs.
Your spending journal will help you start seeing where you can cut costs throughout your frugal month—and beyond. Each week, reevaluate your spending habits and try to cut even more.
“You’re cutting your budget completely bare, so all of these things come into play,” Wood says. “Only spend on your necessities.”
Discover your spending baseline.
Stripping your budget will allow you to determine your spending baseline—the least amount you can spend to live comfortably.
“In this society, we have so many things that are actually wants that we’ve turned into needs,” Wood says. “Scaling back to your bare minimum will help you realize all those things you don’t need on a daily, weekly or monthly basis. It will give you a new understanding of life almost and a greater appreciation of the things you enjoy.”
Establish a new budget.
Finding your spending baseline also will help you establish a budget that better matches your priorities.
A free Dupaco Money Makeover can help you create your budget for 2018. Within your budget, you can tackle those resolutions to save more for your goals. With Dupaco’s You Name It Savings Accounts and Holiday Club, you can systematically save for the things that matter most to you.
“It’s OK to budget for entertainment and going out to eat,” Wood says. “Do the things you enjoy, but budget for them.”
By Emily Kittle