Last week, I wrote a post asking for your inspiring financial stories and I have one to share! This one is from Dorianne and she's sharing how her entire family worked together for common savings goals. Enjoy!
We live in a rural community in Alberta. When we moved out here from the big city I wondered what my kids could do for a job while growing up since there are no paper routes, McDonald's, etc -the kinds of places kids and teens typically work. So, we took on a family job of managing and being janitors of our community hall when our oldest was about 12 years old.
Not only were we involved in our community, the kids were able to earn money and learn to work hard, even, and especially, when we really didn't feel like going to clean on the weekends, etc.
We were paid a base monthly amount of $250, plus hourly for cleaning. The cleaning money went to the kids based on their hours of cleaning. The base monthly amount went in to a separate bank account as savings for 'family fun money' and goals we had in mind. It was NEVER to be touched for anything else, which was tempting at times as we work in oil and gas in this tough economy and could have used it for a few things! BUT we were determined to stick with our savings goal!
The first thing we saved for was a tent-trailer and we have had many fun camping trips with it. The second thing was tickets to Disney World. That was our best family trip ever! The third and last thing we decided to save for was a hot tub -something we all could enjoy for years to come.
As you can imagine, at only $250/month, these goals took years to save for. Now that our kids are grown and starting to leave home and having 'real' jobs, we finally reached our hot-tub goal in the fall and quit our Community Hall job. It really has been a life-long lesson for our kids!
How inspiring was that! Something to strive for, for sure đ Thanks Dorianne!
Credit card debt is something that millions of Canadians struggle with. Itâs like a vicious cycle that never stops, unless you can get rid of the credit cards. However, itâs no secret that emergencies happen and sometimes those credit cards can be a lifesaver. Check out these tips for avoiding credit card debt this year.
Use the Cash Envelope System
If you have never used the cash envelope system, itâs definitely worth trying! Basically, you create a budget and use the cash envelopes as a way to hold the money for your various budget categories. For example, in your budget, you might have allotted $50 for eating out for the month. That $50 would go in your eating out envelope and once itâs gone, it's gone.
Set Up That Emergency Fund
Itâs absolutely nearly impossible to stay out of debt if youâre not able to pay things off when they arise. Start setting up your emergency fund now, so you can stay out of trouble later. It's recommended that you have at least three months of living expenses saved up, but you can do what you feel is best for your situation.
Cut Up the Credit Cards
Of course one of the most common sense ways to avoid credit card debt is to cut up the credit cards. Instead of relying on credit cards, you can build up a savings. Having your emergency fund in place will help you avoid using a credit card when emergencies arise.
Avoid Big Purchases
Many people use their credit card to purchase bigger items that they cannot normally afford. Friends, this is called living above your means. You probably donât need a new television or a bigger bed if you cannot pay cash for it. Sometimes avoiding these big purchases can help you be thankful for what you already have. Instead of using a credit card, start saving cash for your next purchase.
Donât Put Someone Else on Your Credit Card
For some reason there is an option that allows you to put someone else on your credit card. This will rack up your credit card amount fast. The only one who should have access to your credit card is you. If your credit card gets lost or stolen, this can mean big trouble for your finances. If youâre trying to avoid credit card debt, itâs probably best to not put someone else's name on your credit card.
Know the Details of Your Credit Card
There are some credit cards out there that come with a hefty price tag. They lure you in with their lovely interest rates and then pounce on you whenever the promotional interest rate is up. Always read the fine print to your credit card.
Do you have some credit card debt to work off this year? How are you going to accomplish that? What are your tips for staying credit card debt free?
Just how do we resist the desire to buy? We all like nice things. We all want nice things. But do we really need all those nice things? Let me just say that there is nothing wrong with wanting nice stuff, but sometimes we need to draw the line and say enough. I have gone through quite the learning curve in the last couple of years and I have found some things that always seem to help quench my thirst for more:
Smart Ways to Resist the Desire to Buy
What are your Financial Goals?
I think this is the most important thing to consider. If you're trying to get out of debt, a new $2000 couch will not be helping you. If you're saving up for a vacation, a new bathing suit (when you have 10 others already) will not help you. Will buying a particular item help you meet the financial goals you have put in place? Or will it hinder it?
Don't tempt yourself
I rarely think about buying something if I haven't seen it first. Stay out of the stores if you can and do away with catalogues! Unsubscribe from all those emails to your favourite stores. (Even the Simply Frugal emails, if you must! ;))
Reconsider your need
Do you really need it or is it a want? If it's a definite need then there is no way you should feel guilty about your purchase.
Wait on it
I've found many times I can do without something if I simply walk away. For some reason, the item might not seem as appealing days later.
How many hours will you or your spouse have to work to pay for it? Will you have to fix it, clean it, store it, insure it?
Declutter your Home
Having a thorough decluttering session is a surefire way in my books to stop needless spending. I find once I finish decluttering my home, I am so satisfied with what I had let go of and all the space I cleared up, I really don't want to clutter it back up!
Buy Quality the first time
If you carefully consider a purchase and buy something that will last, you won't feel that constant desire to upgrade. There's always a time and a place to buy temporary, but generally buying quality will save you money and time in the long run!
What are some techniques that you use to help you resist the desire to buy?
I am guilty of impulse spending and I'm all too familiar with the feeling of regret after I make said purchase. Are you all too familiar as well? These days, I'm much better at avoiding an impulse purchase thanks to my tried & true method. It's simple, really, and has kept hundreds of dollars in my pocket over the years.
Hereâs my method:
Each time IÂ feel the urge to buy something, I either write it down or save it in my online shopping cart.
Allow 48 - 72 hours to pass without buying the item.
During this waiting period:
I consider whether or not I actually need the item.
I think about what else I could do with that money.
I determine if I already own something that could essentially do the same thing.
I ask myself if I'd still buy it if it wasn't on sale. (Most of the time I impulse buy because an item is on sale.)
After 48 - 72 hours, I reevaluate how I feel about the item. Do I still really want it? Or has the desire faded?
There you have it! My tried & true way to curb impulse spending! It's not 100% foolproof, but it has cut my spending down significantly over the years. After the process, I'm often looking at my list and wondering âwhy on earth did I think I needed all that stuff!â
For those of you that are joining me this month for the No Spend Challenge this could be a good lesson for you to incorporate. Since it is a No Spend challenge, I'd encourage you to write every single item down that you may want throughout the month. At the end of the month, take a look at your list and reevaluate your need/want. So instead of a 48 - 72 hour waiting period, you could end up with a 20 day waiting period. My guess is that if you have to wait that long you probably won't want those items after all. đ
I'd love to know how you curb impulse spending? Any tricks you care to share?
No matter what time of year of year it is, it's never too late to start making a financial plan. It's always a good idea to have a plan in place so you can tell your money exactly what to do so you can reach your financial goals. But, maybe you don't really know how to start? Here are some tips for bringing your financial plan into fruition.
Tips for Making a Financial Plan:
#1. Start with a budget for the year.
To begin, you should think about having a budget in mind. It doesn't need to be a set budget, but it helps if you have some numbers in mind. For example, say you plan on spending $400 a month on groceries. It doesn't have to be a set-in stone budget, but it does give you an idea or a goal to reach towards. You may adjust as needed. Now that you have created a budget for each major area in regards to your finances, the biggest obstacle will be to stick with it. đ
#2. Prioritize your bills and debt.
Most people have bills and/or some sort of debt. With the New Year on the horizon, you should prioritize your bills as much as possible. Also, seriously consider cutting down your debt. The less debt that you have, the more money you can put towards major saving goals.
#3. Know what your financial downfalls are.
Letâs be honest for a moment. Everyone has a financial downfall. Maybe yours is shopping. Whatever the financial downfall is, itâs important to know what it is, so you can avoid it. Everyoneâs financial downfall has the potential to get them in trouble, which is why keeping tabs on it can help your financial plan, instead of hurting it.
#4. Have money goals in mind.
Every year, it's smart to plan on having money goals. For 2016, my family had a âsavingsâ goal in mind. We wanted to save as much as possible so that we could put a large down payment on the house we bought. Maybe in your case, there is a certain amount of money that you'd like to save before 2018 hits. These financial goals help us to create a financial plan that makes sense.
#5. Donât let your financial plan become a distant memory.
Once you have put all this work into your financial plan, donât let it fall to the wayside. Keep on top of it! Put this financial plan into action, you wonât regret it.
#6. Keep records of your financial plan.
This year, you could plan on putting a financial plan binder together. Everything that has to do with your financial plan can go into a binder. The Budget Planner that I have available is a great way to help you to stay more organized and on target with your financial plan.
What tips do you have for someone trying to make a financial plan this year? Do you have any lofty financial goals that you'd like to hit?
