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Don’t Make This Mistake!

Don’t Make This Mistake!

 

I will be the first person to tell you that I love going out to eat. For as long as I can remember, my instinctual response to the question “Want to go out with us?” has always been “Are y’all eating somewhere?”. And I’m not the only one… from 2015 to 2016 Americans spent more money on restaurants and takeout than they did on groceries. While there is nothing wrong with indulging in your favorite eateries from time to time, moderation is key. Not only can overindulgence take a toll on your waistline, it can affect your wallet as well.

 

Food is one of the largest expenses in your budget. After your house payment, it is more than likely your largest monthly expenditure. However, it is often times neglected whenever we start thinking of ways to buckle down on our finances. This is a big mistake. Not only are there several ways to save some dough while eating out, statistics show that staying at home is by far the more economical option. In fact, eating at home costs about half as much as eating out. When you take into account that the average American spends just under $8,000 annually on food costs, we’re talking about a decision that could save you literally thousands of dollars.

 

Like most of our advice here at the Money Dojo, it won’t always be easy to break old patterns of behavior. They were easy, that’s why they became habits. But, much like all other facets of life, the harder you work for something, the more rewarding it is whenever you achieve it. In a time where most Americans don’t have the cash set aside to be able to pay for an unforeseen emergency, can we really justify spending twice as much on our diets?

 

This transition from eating out (mostly) to eating at home (mostly) will not only benefit your pocketbook, it will likely make you healthier as well. Our main focus is obviously finance, but we’re also big proponents of health and fitness, and the positive effects they have on our quality of life. Having all the money in the world doesn’t do you much good if you’re not healthy enough to enjoy it.

 

Instead of paying for a 300% markup at your favorite restaurant, try creating that meal at home for a third of the price. If you have a habit of eating out 5 or 6 times a week, cut it down to 3 or 4. You don’t have to go cold turkey, small changes can make a big difference. Whenever you multiply these small changes over a month or even a years time, they will save you thousands of dollars. I don’t know about you, but I can think of a few things I could do with an extra thousand dollars.

 

Put away the takeout menu, and pick up the spatula. You’re cooking dinner tonight! You get to pick the meal, the ingredients, and the portion sizes. Now if we can just figure out how to get the dishes to clean themselves….

 

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The Most Important Tool in Finance

Most Important Tool in Finance

Millions and millions of Americans are living paycheck to paycheck, trying to make ends meet. Trust me, I realize that breaking that cycle can seem like a tall order. Whatever your monetary goals may be, there is one simple tool you can start using today that will help you finally take control of your financial destiny. The best thing about this tool is that it will cost you nothing, aside from a little time every month to set it up and track it. If you haven’t quite been picking up what I’ve been putting down up to this point, get ready to squirm (that is most people’s almost instinctual reaction to this subject, after all) I’m referring to a budget. I’m not talking about a vague idea of how much money you have, and how much you think you’ll need to survive this month. I’m talking about an honest to goodness budget; that you stick to, that you keep track of, and that you update when need be. Budgets take away the guesswork on how much money you THINK you have, and starts allowing you to make decisions based on the money you KNOW you have. Keep these steps in mind whenever building your budget:

 

  1. Do Your Research: Look at your bank statements from the past few months. Calculate how much you have been spending on things like food, fuel, rent, car notes, etc. Make note of how many of those purchases were things you needed vs things that you wanted at the time. You’ll have to make some short-term sacrifices to reap the long-term benefits.
  2. Be Realistic: Use the calculations you made on your previous few months’ spending habits and create a realistic budget that you believe you’ll be able to adhere to. If you have been spending $500 a month on food, don’t expect to slash your costs in half. It’s always better to give yourself a little bit more wiggle room and not spend everything, then to aim low and be disappointed right off the bat.
  3. Zero-sum game: When you receive your paycheck, you need to assign a destination for every last penny. You shouldn’t have any loose cash floating around. If you don’t spend all the money you expected to this month, you can always find a spot for it in next month’s budget. Also, it’s perfectly acceptable to create a small “miscellaneous expenses budget” each month, for any unforeseen purchases.
  4. Cater To Your Strengths: If you are technologically savvy and would like to build your budget into a spreadsheet, by all means do it. If you would rather pull out the old legal pad and a pencil, do it. If chisel and stone is more your thing, be my guest. Don’t let the relatively small task of tracking your spending turn into a big pain.
  5. Be Consistent: Set aside a time of day, everyday, to review that day’s spending. Update your budget with the new numbers. Even when you don’t feel like updating that day, make yourself do it. This lifestyle will become a lot easier if you can turn it into a habit instead of an imposition.

 

Once you begin to budget your money, you will discover that your bank account is no longer in charge, you are. Eventually, you’ll be able to not only budget for the things you need, but also a few things you want!

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Save your first $1,000

Save your first $1,000

Saving is one of the biggest hurdles anyone can face in their personal finance journey. Often times, it seems like you need every last cent in order to just scrape by. After all, 78% of Americans live paycheck to paycheck at certain points just to make ends meet. So how can you break this vicious cycle, and save your first $1,000? The answer is simpler than you might think.

 

My philosophy on saving is simple, but I’m not going to promise you it will be easy. In life, there are things you want, and then there are things you need. Food, fuel, and a roof over your head. These are things that we need. That 65” 4K television you saw at Best Buy last week? That is a want.

 

Track what you purchase for a month. Take a note of all the things that you could’ve lived without. For instance, that morning coffee stop. This is the key to getting the savings ball rolling. Instead of making those same “want” purchases next month, put that money away. Think of it as an investment in yourself.

 

As the saying goes, you eat an elephant one bite at a time. The same principle works for saving. Put away a little bit every month, and see how fast it starts to add up. Before you know it, you’ll look in your bank account and see $1,000 looking back at you!

 

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Improve your Financial Future Today… For Free!

Improve your Financial Future Today… For Free!

Just about all of us have one thing or another we would love to change or improve upon in our lives. After all, there is always something we can get better at regardless of our current circumstances. I’m assuming, given the fact that you found your way to this post, that you are looking to make some financial strides in the near future. Well, you’re in luck! There is something that every single person reading this post can do TODAY that will improve their current financial outlook. Now, there are as many different facets of personal finance as their are choices at Subway… but we’re not going to dwell on specifics (Always go with the Italian Herbs and Cheese… who am I kidding). So, right now, I’m going to ask you to imagine what part of your current financial situation you would like to change…

Once you have answered that question, give yourself a pat on the back, because you’ve just completed the most important step of this entire process: identifying your very own financial goal. Goal-setting is a fantastic financial tool for many reasons, but allow me to state the most obvious (as well as my personal favorite). IT’S FREE! It doesn’t cost us anything to identify a current weakness that we would like to improve upon. I don’t know about you, but that’s the kind of bang I like to get for my buck. That’s not all, here are a few tips you can use to further optimize the goal-setting process:

  • Write it down– Setting the goal itself is important, but studies show that you can really unleash the power of goal-setting by putting pen to paper and writing it down. Just the simple task of writing down your goals can make them up to 42% more attainable.
  • Make it mobile– Carry your goals around with you in your wallet. Maybe save them as the background on your phone. At the very least post them somewhere that you will see them several times a day.
  • Tell a friend– Don’t keep your goals a secret. Having a confidante will bring some much needed accountability into the situation. Think of them like a workout partner… but for your wallet.
  • Be real- Set a realistically attainable goal. When you start off in the goal-setting process, start small, and work your way up. A little bit of momentum will go a long way.
  • Set the time- Accompany your realistic goals with a realistic time frame. It’s fine to be ambitious, but make sure you’re not setting yourself up for failure before you even begin.

  • Break it down- Divide your big goal into smaller ones. These mini goals will not only serve as stepping stones on the path to the ultimate prize, but they will also allow you to win some small victories along the way to help bolster your confidence. Attaching dates to these smaller goals can also be very helpful.

We all have financial goals we can start working towards. Sometimes you just need a little kick in the pants… well lucky for you…. You entered the right dojo. Follow these simple steps, and make your financial goals your financial reality. Take control of your future, today!

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