To be completely, rip-the-bandaid-off, honest, I’ve never paid too much attention to where my money goes or how much I spend each month. My rule has just always been: “never spend more than you make.” I’ve always paid off my credit card bills each month without late fees or overage interest rates and I keep enough money in my account to pay rent on time each month, etc. Those are my basic living expenses and I have never thought to plan outside of those.
But recently while my boyfriend and I were on a long drive, he turned on a Dave Ramsey podcast and my whole world was turned upside-down. Dave was talking so bluntly about money and putting complicated processes into such simple terms. His podcast is mainly focused on debt and how to get out of debt, but at the core of it he talks about how to manage your money and how to plan for your future. *Cue the “OH RIGHT, I’M 26 AND SHOULD PROBABLY BE PLANNING FOR MY FUTURE” panic.*
So.. what’s the first step to plan out your finances? Well, it’s figuring out exactly what you’re spending money on each month. And how do you do that? Well, you literally go line-by-line through your credit card bills (A great Sunday afternoon activity!) and mark anything that was not a necessary purchase.
When I sat down and actually looked through my credit card purchases, I saw hoards of items that could have been money going into my savings account. I was spending $12 per month on Hulu, when I couldn’t even remember the last time I watched it. (I signed up for a membership after Netflix took How I Met Your Mother off of their service. Long live Ted Mosby!) Since then, I’ve gone through a budget cleanse and made an effort to be an intentional spender.
If you’re in the same boat as me and taking the steps towards becoming more in charge of your finances, here are five things that may be weighing down your bills each month:
There is a subscription for practically anything you could ever want: I have a wine subscription that delivers four new bottles of wine to my doorstep every month. But subscriptions add up fast. If you have five $10 subscriptions, that’s $50 a month. Go through your credit card statement and make sure you’re not still subscribed to something that you don’t ever use. Since they auto-renew, payments can slip under your radar if you’re not careful!
As a millennial who lives in Los Angeles, I can testify that people my age buy coffee almost every single day (or at least multiple times a week). And now that it’s pumpkin spice latte season at Starbucks, that number is probably doubling as I type this. And cashing in at $4 a cup, that credit card bill adds up fast. Coffee is such an easy thing to make at home before you leave for the day. It just takes the commitment of waking up earlier than usual to brew up your to-go cup.
I am 150% guilty of spending too much money on fancy exercise studios. It comes with the territory when you live in the city that has the most boutique exercise studios per square mile *I literally just made that statistic up, but you get the point*. At its core, exercise is FREE: you can go for a run, walk your dog, do ten jumping jacks in front of your mirror, the possibilities are endless! If you’re running low on budget wiggle room, your fitness membership may be something you take off your plate until you’re in a more stable place to afford it.
There is nothing wrong with eating out – trying new restaurants is one of my favorite things to do! But eating out multiple times a week can add up, especially if you use Postmates or another service that charges delivery fees. You don’t need to cut this budget item out entirely, but maybe don’t splurge on a nice meal more than a few times a month, or actually drive to get your meal instead of ordering from an app.
Correct me if I’m wrong, but the worst feeling in the world is going to check the payment deadline on a bill and realizing it’s past due. Set up auto pay on all of your accounts to make sure you’re hitting deadlines and not paying any unnecessary fees. The sooner you can catch the late fees, the sooner those late fees can disappear!
Are YOU on top of your money? Do YOU have any advice to budget better?