6 Money Hacks to Lighten Your Budget

6 Money Hacks to Lighten Your Budget

Winter. The season when hibernating becomes routine, exercise lessens and somehow, extra weight tips the scales in the wrong direction. The same is true when it comes to your spending. We set positive goals to improve our personal financial lives in shape, but somehow it all gets lost in the cold. The daunting task of changing our spending habits become a severe incoming snowstorm we avoid at all costs.

Living on the financial treadmill can lead to complacency and waste—it can even bloat a budget to an unhealthy level if we don’t push ourselves towards success. But, if you truly desire your financial goals, all is not lost.

Here’s where to start: Just like weight-loss, set a goal. First, understand where your money goes each month and categorize everything into a list of: 1) Fixed costs (debt, rent, etc.), 2) Semi-discretionary (food, clothing), and 3) Fully discretionary (vacations, entertainment, etc.). Examine your fully discretionary category and pick a number you wish to save, invest, or reduce debt. Let’s say, 10%.

Following these 6 money hacks can firm up your wallet and put you on track to reach your financial goals.
 

  1. Set up money buckets (separate accounts) for specific purposes; one bucket for your fixed costs, another for your savings and another for those discretionary (semi and completely) spending. This will help you align your available resources and understand where your hard-earned cash goes. It’s too easy to keep it in one place and watch it dwindle without really hitting your goals head on.
  2. Use automatic transfers to investment accounts to capture your savings goals beyond your emergency fund needs. If you pay yourself first instead of last, your chances of success are greatly enhanced. Put your success on autopilot and calendar a review to increase the amounts every quarter.
  3. Increase your 401(k) percentage. If you haven’t fully funded your 401(k), begin increasing the percentage by 1% every two months until you reach maximum. You will be shocked and pleasantly surprised to see how little it impacts your net payroll each pay period. This will grow your retirement plan quickly.
  4. Stop unnecessary spending. Of your discretionary costs, select the expenditures you value the least and eliminate them from your spending. For example, publication subscriptions you just don’t get to, gym memberships you don’t use, cable channels you don’t watch, those extra costs for delivery meals when you’re feeling lazy.
  5. Compile these savings and push them towards your debt. If you have debt that is squeezing your budget, push those savings directly to the debt with every paycheck, even if it’s a small amount, Online banking makes it simple. The more frequently you pay, the less interest you pay. Of course, using balance transfers to lower interest rates will help when available.
  6. Examine your semi-controllable expenses. To dig deeper into slimming your spending, you might need to look at your semi-controllable expenses. For example, understand the deductibles on your insurance policies, and reconsider where you buy consumer goods, including food, gasoline, non-perishable goods, clothes, etc. A good hard look at savings in every category is doable if you have the will and mindset to create positive change.
     

Don’t wait for the winter thaw to begin thinking of self-improvement. Plan ahead, take control, make small decisive steps to increase your financial awareness and allocate resources to places where it will benefit your financial growth.

If you get stuck on old habits, change will never happen and you’ll find your budget sagging. Make change, create habits that support your financial health, and watch as your happiness increases. Start now. You got this!!

Michael Kay
Advisor
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I founded Financial Life Focus because I wanted to work with people who put your success at the forefront of everything they do; people who understand that finding balance is ... Click for full bio

Advisors Will Be Extinct in 5 Years Unless…

Advisors Will Be Extinct in 5 Years Unless…

I’ve had financial advisors for more than 40 years. Not once in those years have I called my advisor to find out what stock/funds I should buy or sell. But I have called to find out where I should get my first mortgage, when to sell my house, or how much income I could get in retirement.

In short -- and I think I’m pretty typical – I was looking for financial advice, as it relates to my life.

Here’s the disconnect, what most advisors do is simply manage their clients’ assets. They determine what to buy, and what to sell, they think about risk management, about growing their practice by finding new clients and about getting paid.

Historically that has been the business model. But as more women take control over financial assets, they, like me, will be looking for a different experience. And unless the financial community is willing to change ….. advisors, as they are today will be extinct in five years.

Advisors who want to survive will have to do a lot more than just manage money – they will have to provide genuine “advice”.  That means doing what’s right for the client, not pushing product and pretending it’s advice.

Women especially, but all investors generally, are becoming more and more cynical. They says, “If I want advice about reducing my debt, that’s what I want and not ‘here’s more debt’ because that’s what my advisor gets paid for! And if saving taxes is what I want then saving taxes should take precedent over selling me a product.”

You may be thinking that spending your time providing advice isn’t lucrative but the reality is that in the long run – it pays off in spades. The advisors who take the time to build real relationships with clients, who provide advice as it relates to their clients’ lives, even when there is no immediate financial benefit to themselves, those who don’t simply push product – are the ones who over time have the most successful practices.

Generally women understand and value service, but they will say, “If I’m paying, I want to know what I’m paying for: Is it for returns? Is it for advice? Is it for administration? I want to know. Then I can make up my mind what’s worth it and what isn’t.”

Investing is becoming a commoditized business and technology is replacing research that no one else can find. Today the average advisor is hard pressed to consistently beat the markets, and with women emerging as the client of the future, unless they start providing real advice, their jobs will likely be extinct in five years.

Learn how to Retain Female Clients through this online course and earn CE credits. Or visit us at here and learn everything there is to know about what women want and how to serve them well.

Strategy Marketing
Marketing to Women
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Paulette Filion and Judy Paradi are partners at Strategy Marketing and have run their own businesses for more than 20 years. Paulette is an expert in financial services and Ju ... Click for full bio