“Cut spending.” “Slash expenses.” “Avoid shopping.” No wonder many of us haven’t learned to be good financial managers. The overwhelming advice about cutting your expenses makes it sound downright unappealing.
The fact is, getting fit—whether fiscally or physically—should be enjoyable, or at least tolerable. Otherwise, you’ll never stick with it. So, building on last month’s feature on budgeting, this installment of the 12 Steps is about ways to manage your expenses so they align with your dreams.
Research tells us that having enough money to enjoy life is really important to seven out of 10 people.* (The remaining three out of 10 may be excused now.) Here we’re proposing ways to retain more of your hard-earned cash by increasing (not reducing, cutting, or slashing) certain activities. It’s all gain, no pain. Here we go.
- Increase scrutiny of recurring monthly payments on your credit cards. You’re streaming more shows and watching less premium cable. And you haven’t set foot in the gym in six months. Automatic deductions for subscriptions and memberships that no longer fit your life can erode your liquidity, drip by drip. Cancel them and enjoy the savings each month.
- Increase your digital savvy about money-saving apps. Today’s financial apps can turn your smartphone into a personal money manager. Digital budgeting tools help you track purchases so you spend less. Shopping apps show you offers, discounts, and coupons from retailers. There are even apps to find the lowest gas prices, the cheapest parking lots, and the nearest free Wi-Fi spots.
- Increase potential returns on your investments by searching for low/no fee funds. Here’s a statistic that will curdle your milkshake: paying just 1% in fees could cost a young investor more than $590,000 in sacrificed returns over 40 years of saving.** Yikes! Time to pull out your portfolio—even if it’s relatively sparse—and work with a financial professional to make sure you’re not paying avoidable fees on your investments.
- Increase your bulk buying habits. You can save considerable cash by buying in large quantities at discount warehouses. But too many of us only go when we’re throwing a party. Get in the habit of purchasing non-perishables—pet food, toothpaste, paper products, detergent—in bulk. Do it regularly and you’ll bulk up financially.
- Be proactive about your health. Maintaining your body is like maintaining your car and helps to reduce the risk of expensive repairs, so take advantage of preventative medicine. Regular teeth cleanings. Flu shots. Eye exams. Screenings. Taking these steps may help you live longer and can reduce healthcare costs in retirement, when health costs tend to increase.
- Increase your donations to charity. As we outlined in last week’s Living Confidently post, donating to charities is a good idea, well, just because. But you may also qualify to deduct up to 50% of your adjusted gross income. Save money by doing good. Genius.
Finally, increase your self-knowledge. If you want to adopt behaviors that improve your financial well-being, a good place to start is by understanding yourself. Take our Financial & Emotional Confidence Quiz to gain some insights into your current level of financial confidence and ways to improve it.
* Guardian's Living Confidently survey, 2017.
** NerdWallet, “How a 1% Fee Could Cost Millennials $590,000 in Retirement Savings”
Brought to you by The Guardian Network © 2017. The Guardian Life Insurance Company of America®, New York, NY.