Don’t spend more than you make. It’s obvious, isn’t? On paper, it certainly makes sense. Out in the field, when you’re exposed to all of life’s great temptations — can you say Amazon Prime Day? — it’s a lot harder to put into practice. In some cases, it’s the little things that trip us up, like bank fees and impulse purchases. In others, it’s bad habits that prevent us from living our best frugal life.
Though it may not be considered a vice, your bad habit of spending money adds up. If you’re tired of seeing your money disappear, consider adopting these financially healthy habits.
- Consider the Latte Factor
Coined by self-made millionaire David Bach, the Latte Factor is how much you spend on your daily caffeine fix. A typical venti latte from Starbucks is just shy of $5. Purchased every day for an entire year, your morning latte ends up costing you over $1,800. Whether or not you spend more or less on coffee, Bach recommends eliminating it from your life and redirecting the money you’d otherwise spend at Starbucks to a high-interest savings account.
Once you get comfortable with denying your Starbucks habit, apply the Latte Factor to other parts of your budget. You may be surprised to find just how many small and unnecessary purchases you make over the course of a year! It might be hard to deny yourself these things but watching your savings account grow will take the edge off.
2.Be Goal Oriented
It’s hard to deny yourself small pleasures when the only reason why you’re saying no is because an article online told you so. Like your family life and career, your finances need purpose. Without it, it’s far too easy to fall off the bandwagon and indulge in excessive spending.
Take the time to understand why you’re saving money. Your goal may be as modest as ensuring you have enough money to cover life’s necessities, like rent and groceries. You could have globetrotting on the mind, with ambitions to tour the world next summer. Or you could be worried about your future and want to focus on retirement funds.
Write these goals out and determine what you need to do to get there, remembering to be realistic in both objective and execution. Don’t strip your budget to the bare minimum and expect to survive. Think of it in terms of your diet. When you limit your meals to vegetables and protein after a lifetime of snacking, you’ll cave for a double chocolate brownie. When you limit all of your spending in one go, you’ll be tempted to blow through cash at the first opportunity.
- Read Terms and Conditions
Sometimes forgoing your daily latte won’t be enough. It’s a great saving strategy for long term goals, but the Latte Factor moves too slowly in the face of emergencies. When you need money fast, and your savings aren’t quite up to the job yet, a payday loan can be a practical solution to your cash flow problems.
Using the loans from MoneyKey as a benchmark, these financial products typically don’t exceed $1,000. Though small, a payday loan’s true advantage is its speed. Once approved, you can receive your cash advance in as little as one business day, making them ideal for bills and repairs that need immediate attention.
But before you apply and secure a loan of any time, it’s important you confirm your choice of lender is state licensed and offers rates, terms, and conditions you can manage. Accepting a loan within your means can help you avoid paying more in late fees and interest. Go online to discover payday advance loans from MoneyKey. Unlike Apple’s terms and conditions, their application forms are easy to read so you can tell if their help is within your financial capabilities.
If for the past 5 months you paid your cell phone bill late, or if you consistently miss the due date of your student loan payments, you’re wasting your hard earned money on late fees and accrued interest. It’s 2017. It’s time that you automate your finances.
When you pre-authorize automatic payments, you’ll never jolt yourself awake at 3 am with the sudden realization it’s been 7 weeks since you last paid your cell phone provider. Besides saving yourself the stress of these mid-night revelations, you’ll also avoid the financial consequences of your absentminded payment style. Better yet, once you automate investments into savings accounts and a 401(k) you’ll never feel tempted to spend money you “promised” to your future.
Some of these habits will be easier to adopt than others, but they’re all worth the effort. Take the time to think about your Latte Factor, goals, loan contract, and pre-authorized payments. These financially healthy habits can help save money faster than you think.