Twenties Hacker just inspired me with their recent post about 5 small financial changes to make in 2012.
Here are their recommended changes and what I already do and plan to do in 2012.
Recommended Change #1: Monitor your money for ONE month
Easy way to do this? mint.com — but not everybody likes their accounts being linked to a 3rd party vendor. I know I don’t. Also, cash transactions are lost.
The best way to monitor your money for a month? Receipts and a spreadsheet.
I started keeping track this way about a year ago. At that time I had about $2000 in debt (not counting student loans. those do NOT count) and an embarrassingly low savings amount. It wouldn’t cover my debt.
Slowly I switched those numbers around and I’m well on my way to paying off my car in a couple of months (if I want to) and I’m well-prepared for emergencies (like losing a job for a bit).
How did I do it? I kept all my receipts. And I made a habit of entering them in my spreadsheet DAILY. After I got in the habit, I got a good idea of what I spend, so I relaxed a bit (now I do it weekly, or whenever I get a chance). I know my account isn’t going to overdraft (it’s a good feeling), so I’m not as anal about it.
However, I decided to try a new system of keeping a monthly record, complete with vendor information and what I purchased. Ha. Talk about not being anal? Yeah … Well I want to see where I can cut back, and I think this will take my system one step further.
Want to try it for a month? Download my monthly money tracking spreadsheet here. Keep in mind that the categories can be changed to fit your specific spending needs. If you use it, let me know how you like it.
Recommended Change #2: Read ONE money-related book
I’m going to take their advice and read The Money Answer Book by Dave Ramsey. I had a friend that was really big into Dave Ramsey a while back, so that was a selling point for me with this book. Of course, I’m going to get this from the library instead of buying it …
Change #3: Create ONE financial goal and complete it
Hmm … my big financial goal was to pay off my car this year. I’m not sure if it’s worth paying off since I’m not in a rush to get a new one. However, I would like to have enough $ saved up by the end of this year to be able to pay off my car if I would like.
Change #4: Cut back on ONE unnecessary expense
Unnecessary expenses? Psh. I have none.
Okay. I’m lying.
My handy-dandy monthly spending spreadsheet has told me that I spend entirely too much on extraneous groceries — things I don’t need but pick up throughout the week, usually after workouts.
My goal (this will be good for my waistline too): No more getting chocolates at the checkout at Wheatsfield. Seriously. It’s $1 a chocolate and I get 2 every time. Sometimes I go there 3 times a week. That’s $6 a week … multiply that by 52 and that’s $312 a year.
Now if I cut out kombucha (which is essentially these trips altogether), that’s $3.99 per kombucha times 3 times 52 which is $622 a year. Together those trips cost me about $1000 a year!
Change #5: Make ONE financial move for your future
Hrm. Well, I can take the $ that I saved up to pay off my car and either pay off my car or put it towards my student loans. OR I could start a small retirement fund with it. Decisions, decisions.
Finally, Twenties Hacker says: By making an effort and choosing just ONE of these decisions, it can dramatically change your finances and give you a better future. All you have to do is just start somewhere, and it can be as easy or as difficult as you are willing to make it.
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