6 Money Hacks To Trim The Fat From Your Budget

6 ways to trim your budget this winter

6 ways to trim your budget this winter

Winter. The season when hibernating becomes routine, exercise lessens and somehow, extra weight tips the scales in the wrong direction. The same is true when it comes to your spending. We set positive goals to improve our personal financial lives in shape, but somehow it all gets lost in the cold. The daunting task of changing our spending habits become a severe incoming snowstorm we avoid at all costs.

Living on the financial treadmill can lead to complacency and waste—it can even bloat a budget to an unhealthy level if we don’t push ourselves towards success. But, if you truly desire your financial goals, all is not lost.

Here’s where to start: Just like weight-loss, set a goal. First, understand where your money goes each month and categorize everything into a list of: 1) Fixed costs (debt, rent, etc.), 2) Semi-discretionary (food, clothing), and 3) Fully discretionary (vacations, entertainment, etc.). Examine your fully discretionary category and pick a number you wish to save, invest, or reduce debt. Let’s say, 10%.

Following these 6 money hacks can firm up your wallet and put you on track to reach your financial goals.

  1. Set up money buckets (separate accounts) for specific purposes; one bucket for your fixed costs, another for your savings and another for those discretionary (semi and completely) spending. This will help you align your available resources and understand where your hard-earned cash goes. It’s too easy to keep it in one place and watch it dwindle without really hitting your goals head on.
  2. Use automatic transfers to investment accounts to capture your savings goals beyond your emergency fund needs. If you pay yourself first instead of last, your chances of success are greatly enhanced. Put your success on autopilot and calendar a review to increase the amounts every quarter.
  3. Increase your 401(k) percentage. If you haven’t fully funded your 401(k), begin increasing the percentage by 1% every two months until you reach maximum. You will be shocked and pleasantly surprised to see how little it impacts your net payroll each pay period. This will grow your retirement plan quickly.
  4. Stop unnecessary spending. Of your discretionary costs, select the expenditures you value the least and eliminate them from your spending. For example, publication subscriptions you just don’t get to, gym memberships you don’t use, cable channels you don’t watch, those extra costs for delivery meals when you’re feeling lazy.
  5. Compile these savings and push them towards your debt. If you have debt that is squeezing your budget, push those savings directly to the debt with every paycheck, even if it’s a small amount, Online banking makes it simple. The more frequently you pay, the less interest you pay. Of course, using balance transfers to lower interest rates will help when available.
  6. Examine your semi-controllable expenses. To dig deeper into slimming your spending, you might need to look at your semi-controllable expenses. For example, understand the deductibles on your insurance policies, and reconsider where you buy consumer goods, including food, gasoline, non-perishable goods, clothes, etc. A good hard look at savings in every category is doable if you have the will and mindset to create positive change.

Don’t wait for the winter thaw to begin thinking of self-improvement. Plan ahead, take control, make small decisive steps to increase your financial awareness and allocate resources to places where it will benefit your financial growth.

If you get stuck on old habits, change will never happen and you’ll find your budget sagging. Make change, create habits that support your financial health, and watch as your happiness increases. Start now. You got this!!