With Labor Day behind us, a new school year and season ahead, there is no better time than now to organize your financial life. Resolutions and goals should not be reserved simply for the New Year; we can and should take inventory of how we are doing financially at any point in the year. Personally, September has always felt like a new beginning, a second start – maybe it’s the freshly printed planners or the forever student in me. Whatever the case, you too can use September as a time to reflect on the last nine months and plan ahead into the New Year.
Regardless of whether or not you made financial goals in the beginning of 2019, these tips below will help you stay on track or evaluate where you want to be for 2020.
Track Your Spending
If you aren’t already, start tracking your spending. This is the only way to know how much money is going to a given category (ie. food or gas), plus you can’t improve something that isn’t measurable. There are many apps out there that will connect your bank accounts and do the tracking for you, I recommend manually tracking your spending for at least three months. This way you’re being mindful about every purchase.
This is sneak peek into my August spending and tracker. You can get the template here.
If tracking your spending is something you already do, then break down your top three spending categories. Then look at your last three months and ask yourself the following questions: Do you like where your money is going? Does your spending align with your goals? Are you following the 50/20/30 budget rule? This is where you allocate 50% on your needs (ie. housing), 30% on wants (ie. entertainment), and 20% towards savings (ie. emergency fund).
Add Bills to Your Calendar and Consolidate Dates
There is nothing worse than opening your bank account and realizing that you have less money or are overdrawn because a bill payment was withdrawn from your account. This happened to me just this month! To prevent this from happening, mark all your bill due dates with their totals into a calendar. If you have the means to, you might want to set an automatic payment. Of course, this is not feasible for a lot of people, so the calendar reminders will help you prevent late fees.
If you find that your bills are scattered throughout the month and you’d prefer to have all your bills due around the same time, call the company and ask if they can move your due date.
Open a high-yield savings account
Are you constantly transferring from your savings to your checking account? I was totally guilty of this. It wasn’t until I opened a high-yield savings account with a different bank that I stopped stealing from future me. Not only does a high-yield savings account help with delayed gratification, but it offers a higher interest rate on your money. In a traditional savings account, you’ll be earning 0.01% on your money, whereas in a high-yield savings account, you might earn 1.90%.
What does this mean? If you have $100 in your traditional savings account, after one year, you’ll have $101. Having earned a whopping $1! In a high-yield savings account, your $100 is $119 after one full year. Meaning you will have earned $19 by doing absolutely nothing. This might not seem like a big deal, but depending on how much you keep in your account you can see greater returns.
The fun part with opening a high-yield savings account, is naming your accounts whatever you want. I make my names the goal I’m striving towards, this keeps me motivated to add money. Here’s a breakdown on my few accounts based on different saving goals – “Japan Fun” for my upcoming trip to Japan and “The Fed Doesn’t Own Me” for my student loan payments.
Consider the upcoming holiday season
The holidays tend to come up on us without warning and this can lead to overspending. According to Magnify Money, Americans went an average of $1,230 into debt during the 2018 holiday season. Finalize your intended holiday spend today to help you avoid debt this holiday season. An easy way to estimate your holiday spending, is by look back into last year’s. If you’re not able to, then make a list of everyone you want to buy a gift and what you’re thinking of buying then Google the item and add the total amount. Make another list with any food or utensils you’ll be bringing to a dinner parties, add their recipes and cost for each ingredient to the list.
Example: I make 50 empanadas for Christmas every year. My ingredients require 60 dough discs, which is six of Goya’s 10 dough discos packs selling for an estimated $2 each. I’ll also need four packages of guava paste at $4 each and lastly I’ll need three 8 oz Philadelphia Cream Cheese at $2 each. Don’t forget the eggs! Another $2 for a 12-pack. I’ll need at least $44 to make my empanadas for the holidays.
10*2+4*4+3*2+2 = $44
Finally, this could be the time you suggest to your family alternative or low-cost ways to celebrate the holidays, like a potluck Thanksgiving or Secret Santa.
Remove spending temptations
Okay, removing all and every bit of spending temptation isn’t realistic. Finish strong in 2019 by saying goodbye to all the email marketing companies throw in your face to get you to spend money. Companies increase their marketing efforts to encourage you to consume during the holidays, and through in deals and specials offered only to their email subscribers they make it more attractive. The best way to deal with the temptation to buy a pair of leggings made from plastic water bottles is by unsubscribing from these emails! They can’t tempt you if they can’t reach you. If you’re feeling the FOMO from these deals, you can always create another email to use only for shopping purpose. This will prevent you from becoming a victim of email marketing without having to sacrifice the FLASH SALE notification.
Personal finance is personal to your life and needs. Take and change any of the tips above as needed. But, I ask you to keep working towards your goals, this is not the time to slack off. Make this last few months of 2019 count!