6 Simple Ways to Curb Your Spending in 2019
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At this point in January, your bank account is probably still recovering from the holiday season. If your sudden lack of funds has you entering the new year determined to curb your spending, you're not alone. A recent study shows that 94% of millennials plan on making financial resolutions in 2019. And with the season of excessive spending behind us, now is the perfect time to start reevaluating your finances.
Although it's a daunting task, it's well worth the effort, according to Keri Danielski, a consumer finance expert for Mint and Turbo. "Establishing good financial habits will last a lifetime," she tells MyDomaine. "And establishing them early on can help ensure the ability to have enough money to put in a savings account." If you've resolved to take control of your finances this year, here are six easy, actionable money tips she recommends for starting 2019 off right (aka with no money anxiety).
Track Your Spending
According to Danielski, the best thing you can do for your finances is to track your spending. "There's no doubt that this practice will help you get a better handle on what you should and should not be spending your money on," she explains. "The insights you gain—I spent how much on that?—may prompt you to curb your behavior in order to achieve your larger financial goals," she adds.
Use a personal finance tool like Mint, Clarity Money, or Digit to make keeping tabs on your spending less daunting. "Because Mint helps you watch and manage your money, it will also help you find savings along the way," offers Danielski. "The app crunches the numbers and provides personalized recommendationsbased on your lifestyle and goals, much like a financial advisor, so you can discover new opportunities to save as well," she adds.
You don't have to make major lifestyle changes to cut down on excessive spending. "Start with the little things," suggests Danielski. "Buying coffee and a bagel every morning on your way to work can really add up. Instead, make coffee in the morning at home or take advantage of the free coffee at work," she offers. "It's always smarter to start small and work your way to larger goals."
Know When to Use a Debit Card Versus a Credit Card
One of the easiest ways to curb your spending is by using your debit and credit cards wisely. Despite the promise of racking up points and rewards, a credit card may not be the best fit for every purchase. If you're unsure which card to use, Danielski has a few easy tips for reaching for the right one:
For budgetary control: "When it comes to sticking to a strict budget, there's no question the debit card is the winner," she says. "You can only spend what you have in your checking account so there's no chance of getting into debt. Debit cards don't curb wasteful spending though; they just cap your downside if you lack self-control," she clarifies. "If you don't trust yourself, leave your credit card at home."
For usability: "When it comes to usability, credit cards can be slightly easier than debit cards," confesses Danielski. "Debit cards can sometimes be problematic when used for travel-related expenses like hotels, gas and rental cars. These types of merchants commonly place a 'hold' against the funds in your account that exceeds the actual amount you're going to spend," she explains. "Using a credit card for the larger expenses can be beneficial as well, with more and more offering cash back deals or miles based on the amount you spend."
Save Spare Change
Working toward a big-picture savings goal can be intimidating, so Danielski recommends taking a micro approach. "Pocket change is your friend," she tells us. "Whether it's left over from your morning coffee or from laundry day, pocket change can add up, and quickly. Keep a savings jar at home where you can dump all the extra change you accumulate through the week," she advises. "This can eventually be put away in savings or put aside as extra spending money for an upcoming trip."
Although it's tempting to compare yourself with others, "don't fall victim to the 'keeping up with the Joneses' mentality," cautions Danielski. "Sure, your friends or neighbors might drive nicer cars, have the newest technology, or take expensive vacations, but that doesn't mean you have to do the same," she reminds us. "Think of it this way: Your neighbor might have financed that Mercedes, put the new flat-screen on a credit card, and taken out a personal loan to pay for a vacation. You're not a lemming; don't follow the group off a cliff."
Follow the 50/20/30 Rule
For a straightforward framework that makes managing your finances easy, Danielski suggests looking to the simple 50/30/20 rule. "50% of your earnings should go toward essential expenses like rent and utilities, 20% should go into savings, and the remaining 30% can be used for personal expenses like going out on the town," she explains.
"With 20% of your paycheck going directly into a savings account, you won't be tempted to spend it on other expenses," she adds. "It can remain safe and separate from the account you use on a daily basis, and you can access it in case of unexpected expenses. As an added benefit, money in your savings account will grow slowly but surely over time."
Contrary to what you might think, you don't need a high income to follow the tenets of the 50/30/20 rule. "Anyone can do it," says Danielski. "Since this is a percentage-based system, the same proportions apply whether you're earning an entry-level salary and living in a studio apartment, or if you're years into your career and about to buy your first home."
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