I still remember my first piggybank, it was blue with different slots for all the different coins and it would make a funny little jingle every time you put in a coin, and I remember how every time I did, I felt very grown up. I also remember how easily I would spend my allowance on enough candy for a month and eat it all in one day. Not so grown up. Now here we are over a decade later, and though my expenditures aren’t that awful, I want to do better. Making most of my life surely involves making most of my money, right? Now I’m no expert (yet!) but I want to start making changes in my spending habits.
I did a little research on ways to save money and I got quite overwhelmed by the information out there, I mean its super helpful for sure, but it makes it quite impossible to know where to start. So I decided to start simple at the basics and share my first steps with you, hoping its helpful for you guys as well!
Step 1| Facing Facts – I don’t like to admit it but I’m not that great with confrontations, so if I don’t see exactly how much I’m spending on that coffee to go every month, I can still pretend its not THAT bad. So one day I decided to stop hiding, got out my calculator and basically fell off my chair when I found out how much I’d actually been spending on those coffee runs. I’m serious, I did NOT expect it to be that much and I felt really stupid. I started adding everything up in specific categories and I was really surprised by my spending habits some of which I did not even know I had. Now that I recognize them, I can actually change them. So, yes, step one: face your spending facts! Do you really know what you’re spending your money on?
Step 2| Write Down Your Priorities – I know this point sounds a bit cheesy but I’ll try to explain why I think this is so important. According to what I spend in a month (besides the monthly fixed expenses), you’d think my priorities in life are 1. clothes, 2. food/coffee, 3.traveling/experiences. I love clothes, obviously otherwise my current job would be a huge mistake, but I don’t think clothes should be that high on the list especially since my closet is so full its embarrassing really. And I know that I have a serious love affair with coffee, but how much I spend on it is really disproportionate. So I sat down and wrote down my priorities, read them, disagreed with myself and set new priorities. What make you happy? What is money you’re throwing down the drain on a monthly basis? What do you wish you could do more often? These questions help figuring out your priorities, but its very personal so everyone’s list will be very different. Traveling and fun experiences with family and friends are definitely higher on my list now and so is food but I added the word “healthy” to it, plus I kicked “clothes” down a couple of spots. I could seriously write a whole post on this part but I think you get the gist. So what are your priorities? Do your expenses reflect those priorities?
Step 3| Make a Realistic Plan – I’m definitely an unrealistic planner at heart. In my head I can do 90 minutes of work in 30 minutes and cutting my spendings in half “should be doable”. One semester I took 16 pre-med credits, worked 20hours a week next to that at times, was involved in a board, yearbook-team and taught ballet classes with a friend, while I arranged my semester abroad and oh yes I also had a boyfriend. It was honestly the most unhealthy semester of my life so if college taught me one thing it is to know myself better and make more realistic and achievable plans (okay it taught me a lot but I think the sentence sounds nice like this so forgive me). The problem with unrealistic plans is that a) you’re very likely to mess it up, which will result in b) you falling back into your old patterns. So instead of cutting on my coffee runs completely, I will allow myself one cup a week. In that case I don’t have to feel too bad when I do get myself a cup, but I know that that is it for the week. So be strict, but not TOO strict. I also decreased the amount of money I put on my savings account at the beginning of the month. It sounds contradictory but putting too much on my savings usually lead me to transferring that money back so I could spend it thinking “I put a lot in my savings to begin with so taking a bit back isn’t that bad”, so this happens more and more often and I end up not saving that much at all. Instead, putting a more realistic amount on my savings account makes it easier for me to not touch that money anymore because its the least I want to save up and I know I should be more than fine with the money I have left to spend that month. This first plan does not have to be very detailed and elaborate, just set some rules and budget that will get you started will suffice. Its all baby steps!
I hope these first steps will help you along a little, they certainly have opened my eyes on my finances even though its something I wish I didn’t have to think about that much, its so important. So I want to share more of this process and the tips and tricks that work for me. Of course, what works for me might not work for you but sharing is caring so if you have some ideas, tips or thoughts please share them in the comments below, its very much appreciated!