Dear 100 Hour Board,
What are your best financial/budgeting/money-saving tips?
-Saving for Vacation
Here are Tipperary's Top Three Thrift Tips:
- Plan out your meals: You can eat pretty well for under $5/day per person if you plan out your meals and shop right. If you're eating out it's near impossible to get a good meal for less than $5. Those extra $5-10 a day add up pretty quickly and can save you a few hundred a month. Make sure when you plan however that you budget and plan for snacks and get food you want to eat. If you run out of food you want to eat you'll just end up eating out anyways.
- Set up automatic payments to your savings account: The best way to save is to put it in your budget and make it automatic. That way you don't have to think about it, and the money reaches your savings account without the chance of burning a hole in your pocket. You can set up an automatic transfer for 1-2 days after you receive your paycheck so that say 10% gets saved every month.
- Use Acorns: Acorns is an app that rounds up your puchases and invests the changes. I've never used it but several of my friends recommend it.
I agree with Tipperary that meal planning/cooking saves a ton. I use the Smith's website/app to go through any coupons or deals for the week, then pick recipes based on deals and make a list from there. Doing this helps mitigate impulse buys, and ends up saving $15-20 every trip. Also, if I pick recipes I'm excited to make/try, then I'm much less likely to eat out, even if it's been a long day.
Another thing that's been helpful for me is a modified cash envelope system. I've known about this approach for a while, but it never really seemed practical to do everything in cash. Still though, I had some habits I wanted to improve and thought a less extreme approach might work. After looking at our monthly spending, my husband and I realized everything was pretty consistent except our eating out/fun money, and it was often a big chunk of the month. To help with that, we figured out what we felt okay spending on these non-essential things, and now we take that amount out in cash each month. We have it divided up into what we spend together (like movie dates, eating out, or social activities) and what we spend individually (often fast food on the go, or when I feel the need to go to DI). It's been super helpful to have a fixed number that allows for fun but prevents indulgence.
Dear Saving ~
For me, it's budgeting software that I absolutely adore: YNAB. It stands for You Need a Budget. (Because you do.) I had a pretty detailed budget in an Excel Spreadsheet for a very long time. I was very nervous about using other software, because surely there was no way they could do everything I wanted, right? Wrong. YNAB had everything I wanted when I started over 7 years ago, and they keep making it better. It is game changing!
But Dragon Lady, Mint is free! Why would I pay for YNAB?
Good question. I used to use Mint. I liked it. The main difference is the crucial difference, though. Mint looks backward and how you already spent your money. YNAB looks at the money you have right now, then looks forward and says, "What does this money need to do before I get paid again?" It puts you in charge of your money. You get to tell it what its job is, rather than looking in the past and saying, "Oh man. I spend so much on eating out. $200 in one month?! I should cut back." That is a nebulous and vague goal. You're not likely to follow through. But YNAB lets you say, "Wow. I spent $200 on eating out last month?! That's a lot. I'm only going to budget $150 for eating out this coming month, and work hard to stay inside that budget." It's a concrete goal. And if you overspend, you have to pull that overspending out of another category. You have to tell yourself, "I am prioritizing Cafe Rio today over being able to go to the movies/going on a nice date/next months' rent/whatever you pull it out of." It really makes you look at your spending and see if it lines up with your priorities.
I could evangelize it all day long. Really I could. But to prove how much I want you to try it, I could give you a referral link and give us each a free month, but I'm not going to. Instead I'm going to give you links to a 3-month and 4-month free trial. (Not sure why you'd do a 3-month trial when you could do a 3-month, but the choice is yours.) I get zero kickback here. You could find those same links by googling, "YNAB 4 month trial". (That's how I found them.) That gives you time to really play with it and see if it works with your lifestyle.
Create a realistic budget. I find it easier to save when I set realistic expectations on how much I'll spend on food, shopping, etc. rather than expecting to live on a bare-bones budget in order to save for a goal. Personally I really like Mint. It allows you to create a categorical budget, and will send you email notifications when you're overspending in a particular category. I hold onto those emails and reevaluate my overall budget every few months to keep myself on track.
If there are any categories where you struggle to stay within your desired spending limit, withdraw cash and use that. Its much easier to understand the value of your money when you have it in hand.
If you have any debt, do your best to pay it off. It may mean making some sacrifices now, but it will set you up for a stable financial future.
Also, you should definitely start saving for retirement if you haven’t done so already.