The Best Money Moves On Any Budget
Total household debt across the country had dipped a bit around the time this pandemic was hitting its stride, but now it’s going back up. A lot.
Not all debt is equal, but let’s not kid ourselves. This is not good news. It’s time to get serious about our personal money moves.
What Are Money Moves?
"Money moves" is a fancy term for taking more effective control of your personal or small business finances.
It’s something we’ve been all about here at Budgetry and across the Goalry family since the very beginning. If the rest of the financial world is starting to catch on and follow our lead, all the better! A rose by any other name smells just as sweet, and progress (no matter how big or small) by any other name is still progress.
There are plenty of arguments out there about the “worst financial decisions” you can make in such-and-such situation or this-or-that economic climate. I won’t try to persuade you of how each one should be ranked in the Museum of Financial Crash-n-Burns. What I will say, however, is that one of the most common – and most destructive – errors we can make is to allow ourselves to become discouraged.
“What’s the point? We’re doing the best we can – there’s no point spending extra time looking at nickels and dimes. Try not to think about it. Just... deal with money when I have to and ignore it the rest of the time. Money’s not everything, right? Whatever.”
If you’ve ever had this sort of internal monologue running through your head, you know how hard it can be to even balance your checkbook, let alone update your budget or analyze your debt. Sometimes the voice of discouragement is obvious and loud; other times it’s just running in the background all day. It’s not always such a bad thing. We all need to vent sometimes. Curse and mumble and wish things were different. That’s OK for five minutes. It’s normal for ten. After an hour or so, however, it starts to become our new normal. We start to believe that temporary feelings are permanent facts.
They’re not. Any suggestion that everything’s hopeless or that nothing you can do really matters at this point is simply a lie. It’s destructive. And depressing.
So that’s the bad news.
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The good news is that it’s also entirely in your control whether or not you put those thoughts in charge. Money moves are about more than spending wisely, although they’re about that as well. Money moves are about more than building a budget, although that’s a pretty important step if you’re going to make real progress. Money moves are about accepting the parts you can’t control, then taking more responsibility for controlling the parts you can. They’re about “what COULD I do?”
And they’re much less depressing than that other stuff, so... bonus.
Building a Budget
Too many of us think of creating and managing a household budget about the same way we think about getting a root canal or doing our taxes. We know it’s important, but... yuck!
Like figuring out how to assemble furniture in a box or cook without peanuts or whatever, the hardest part is honestly just getting started. Once you get going, it’s just a matter of pushing through. Keep in mind that budgets are empowering. They’re YOU making better informed decisions about how YOU choose to spend YOUR money.
I could carry on forever about a good budget, but if I’m being honest I’m unlikely to top my favorite article from my colleague Brandy and it’s the best guide to building a budget I think I’ve ever read (including several I’ve written myself – so that’s humbling!). You want an easy way to begin making life-changing money moves? Read it. Bookmark it and revisit it once a week for at least a month. Print it out if that helps, and keep it wherever you do your money stuff for easy reference.
Educating and inspiring yourself may not sound like major money moves, but they absolutely are. I’d argue not only are knowledge and mindset total money moves, they’re in many ways foundational to all the rest!
Brandy also shared her ideas on making the most out of good old basic Excel or any other computer spreadsheet used for budgeting. It’s practical and low-stress while being super-effective and insightful.
Hang on, though – finish this one first! You can go ahead and open those in new tabs or whatever, but we’re not done here! We’re all over making the most of simple money moves, remember?
Maintaining Your Budget
As you begin actually referencing and utilizing your budget throughout the week, be aware that chances are good you’ll come across unexpected expenses or realize you should have included an additional category or two. Some months you won’t stick to it as well as others. Occasionally you may find yourself at a complete loss as to where some chunk of money actually went.
That’s OK. I mean, we want to figure out what went wrong and adjust, but that’s part of the process. Some would say that’s the whole point of building a budget to begin with. Be patient with yourself, but be stubborn as well. Keep refining and re-committing yourself and before you know it, using a monthly budget will feel more natural. You may even start to like it.
Budgeting doesn’t automatically bring in more income. It can, however, help you eliminate more unnecessary, unfulfilling spending each month than you probably think. It can help you avoid late fees and additional interest, which is almost better than simply having more money to start with. And knowledge is power. To fix or improve something, you have to know what’s happening with it in the first place. Most impactful money moves start with an effective budget.
Paying Down Debt
Once you’ve got a better idea of your total income and debts, you can become more strategic about what you spend and how you spend it. One of the best uses of your resources (once your monthly essentials are covered) is to focus on paying down debt.
The Debt Snowball Method: A Wise Trick
It’s easy to just kinda pay stuff as it comes in. We add a little extra here and there if we have it, or we set bills aside when money is short and hope we’re not actually late on them again. Your debt reduction efforts will be far more effective, however, if you have a plan. If you’re not familiar with the “snowball method” (focus on paying off smaller debts first to clear the way to focus on big debts), we’ve written about it here before.
Others prefer the “avalanche method” (prioritize debts with the highest interest rates), and that’s fine as well. The point is, while some plans are better than others, most plans are better than no plan.
Getting a Personal Loan to Consolidate Debt to a Lower Interest
In some situations, a debt consolidation loan may be the best answer. It’s not always the right path for everyone, and you should never borrow money carelessly – especially if you’re not ready to make sure you don’t end up back where you started. But if your monthly obligations are outpacing your monthly income, maybe you need to restructure your debt to make it more manageable. Just a thought.
Oh, and one last note on paying down debt. You wanna know one of the most often overlooked ways to help reduce credit card debt or other personal debt? Stop spending so much. Don’t charge things. Hmm... I wonder if a monthly budget would help with that?
Finding Ways To Save
The Best Way to Create an Emergency Fund
Everyone should have an emergency fund. Enough to live on for a month or three and easily accessible. If you can’t set aside that much realistically, then try to build up a smaller savings account. Shoot for $1000. Or $500. Or $50.
Blaine, what good is $50 in savings? That won’t help?
It will if you’re ever in a situation where you absolutely have to come up with $49.95 or... bad things. And saving $50 is a huge step towards saving $100. Having $100 is essential if you’re ever going to make it to $500. You see how this works?
Any saving is better than no saving.
I realize you’re already working very hard to try to stay on top of things. No one has the right to criticize you for doing your best and falling short. But let’s also be honest – Americans as a whole aren’t really known worldwide for our ability to spend wisely or focus on the long-term good. It’s just not how we roll. It CAN be how YOU roll, however.
(Do the kids still even say that? “How we roll?” I hope so, otherwise I just sounded really dated.)
If you think you just can’t do it alone, consider micro-saving. This is easily done with an app on your smart phone, or it might be offered by your financial institution. The app rounds up your purchases to the nearest dollar (or other amount) and sets aside the difference for you in a committed savings account. You’re unlikely to notice twenty-nine cents here, eighty-four cents there, but over a few months it actually adds up rather impressively.
Look at pre-tax options offered by your employer towards retirement or as part of health savings accounts. That’s money you need to spend on those things anyway, and by pulling it out early you’re both securing those funds for essential needs and reducing your tax burden.
Finally, commit time each week to read through one of the “how to cut expenses” articles here or on other reputable sites. Most of these are cumulative – once you’ve cut the expense, it can stay cut. If you do one new thing a month, by this time next year you could be a millionaire!
OK, I’m kidding about the millionaire part. But how much difference would an extra $100 or so a month make in your budget, especially if you used it to pay down credit cards or other debt?
Clean / Organize
When you can’t look at the spreadsheet any longer, take a break and clean the office. Or the den. Or the garage. Doesn’t matter. Organizing is good for you.
This may not sound related to financial budgets, but generally speaking, clutter is waste. Organization is a mindset as much as a skill, and getting our **** together in one area often helps us manage other areas as well.
Plus, we’re emotional creatures. Cleaning and organizing makes us feel better. When we’re trying to budget or learn to spend wisely or whatever, that’s never a bad thing.
Investment / Retirement
One of the most powerful money moves you can make is to refocus on investing for the future and securing your retirement. Look into modest increases towards your 401(k) or IRA – or set one up if you don’t have it to begin with. Even small additional investments now can pay off down the road.
This might be a good time to consider more immediate sorts of investments as well. While you never want to risk money you can’t afford to lose, there are numerous ways to get involved in a range of different investment mechanisms without a huge initial outlay. You can often choose just how much risk you’re willing to take, remembering that higher risk means higher gains or losses as the tradeoff.
If you’re not comfortable figuring it all out by yourself, and don’t want to hire a professional, there are some amazing technological options which will guide you through a series of questions about your financial goals and other preferences, and either make suggestions or simply choose for you. You can be as involved as you wish, or set some initial parameters and just check in from time to time.
Cutting Expenses
Easy Ways to Cut Your Bills
We hear a lot these days about “cancel culture.” Here’s a better way to get excited about “cancelling.” When you check your credit card statement and find something has automatically renewed or some subscription has been added, track it down and cancel it. If you were talked into add-ons to your cable TV or streaming services and the introductory rate has passed, cancel those extras.
If you have multiple services which all do the same basic thing – but one has this show and one has that show – binge those babies you can’t get everywhere else and then cancel most or all of them.
Plan your menus so that you make better use of leftovers. Try some store brands (it adds up). If you discover you hate Great Value peanut butter, that’s fine – buy the name brand. 90% of the time, however, you probably won’t be able to tell the difference. Recommit to shaving quarters and dollars off your daily habits. Those quickly become dollars! And turn down the thermostat, friend – put on some socks and long sleeves. You’ll live.
Strengthening Your Credit Score
If you start doing these other things, you’ll see a difference in your credit score. What’s that? You don’t check your credit score regularly?
How to Improve Your Credit Score
Let me start again. Start checking your credit score regularly. Pay attention to your full credit report from time to time and question anything that doesn’t look right.
Stronger credit scores mean you pay less for anything you finance. A decent score gives you more options for less money. It means you can spend less on interest and fees and shopping around for financing and more on the stuff you care about.
Educate / Inform Yourself
You’re already doing this one. I simply can’t emphasize enough what a difference it makes to simply set aside time each week to read up on something of interest to you related to your personal or small business finances.
Maybe your life isn’t dramatically altered by every single article or blog post. Over time, however, you’ll start to realize that you know more than you did. You remember strategies, you notice opportunities, you spot scams, and you understand small print better than you did before. Knowledge is power. That’s just as true with financial knowledge as it is in any other realm.
Conclusion
Money moves don’t have to be dramatic. Most of the best ones aren’t. They will have far greater impact if they’re consistent, however, and if you don’t stop with one or two. You don’t have to fix it all today, or solve every problem this month. Start moving the right direction. Believe. Get stubborn about the right things. You’ll be surprised how quickly you can tell a difference.
If along the way it turns out you’d like to know more about lowering your interest rate on credit cards, or what the most common options are when refinancing a mortgage, or how to apply for a debt consolidation loan, we can help. We maintain a curated database of reputable online financial services and have a pretty good track record matching up clients with the service most likely to meet their needs.
In the meantime, keep reading. Keep pushing forward. You can do this. I promise, we’ve seen it happen with folks not nearly as talented or good looking as yourself. This one lady, I swear – you’d think—
Actually, never mind. I probably shouldn’t share that. The point is that you’re in WAY better shape than she was, mentally, financially, and... let’s just call it “emotionally.” You got this.
Let us know if we can help.