Spoiler alert: everyone does money differently. We can never really judge someone’s financial situation by their habits — maybe the person who treats themself to a weekly nice dinner out spends the rest of their week clipping coupons to make it worth it. We’re all about bringing new money-saving tips to the table because even if they wouldn’t necessarily work for us, they’d definitely work for someone. If you’re looking to change it up and save a bit more the rest of this year, read on — this may just be the money “hack” for you!
I came into my passion for personal finance in kind of a roundabout way. I was never taught much about finances growing up, just the basics like don’t spend your whole allowance in one place, and don’t overdraft your savings account. (Which I did a lot in high school. What? Those Juicy tracksuits weren’t going to find their way into my closet on their own!)
It wasn’t until I graduated college and got my first salaried job — a meager $37,000/year — that I realized I needed to figure out this whole finance thing, stat. I remember being 21 years old, living at home with a journalism degree, driving my old Subaru station wagon to my older brother’s house to ask for his help. I asked all the hard-hitting finance questions, like how do I save money? How much rent can I actually afford? And how much should I be putting in a 401k?
Ever since he set me on the right path and I started seeing my savings account slowly growing, I became addicted to personal finance. And quickly, saving and investing became as fulfilling as shopping and showing off my new clothes had once been. I started reading personal finance books and blogs, investing in Index funds, and fighting for myself at work to get raises, bonuses, and promotions just to see my little nest egg grow.
But while I’ve slowly moved up in salary range and set out ambitious savings goals, I always worry I’m one bad decision away from missing my targets. Over the years, I’ve culminated a few tips and tricks to staying on track, but there’s one single rule I stick to religiously to make sure I know where my money is going:
I don’t sign up for anything requiring automatically recurring payments.
As humans, science has proven that we’re unlikely to change the state we’re in. That’s a great thing when it comes to being automatically enrolled in your company’s 401k, but bad (in my opinion) when you’ve signed away your money each month for meal kits, workout classes, and beauty product automatic shipments.
Companies know that it becomes another chore to have to cancel your subscriptions, and you’re unlikely to take even a few minutes out of your day to figure out how to nix them once you’re committed. The problem is, you likely don’t even realize how much of your money you’re losing each month to something you probably only use because you already paid for it! Like that time you only went to spin class because you only had two days left in your current ClassPass cycle.
So, if something requires a recurring payment, I’m out. Not signing away my money before I have it each month allows me the freedom and control to consciously spend my money on what I want at any given time, instead of what I already signed up for.
I know this may not be possible for everyone to cut out all their recurring payments, but consider it within reason. Do you have a gym membership, but also a ClassPass membership? Do you buy groceries each week, but also have meal kits and ugly produce delivered to your home? Do you have a public transit payment, but also pay for a bike share program? Do you pay for more than one music streaming subscription?
My challenge to you is to go through your bank statement and write down all the recurring monthly payments you are committed to right now. Are there any you’re willing to part with to see if you actually like that service, or if you’re just using it because you have it? Give it a try and then allow yourself to recommit to what you actually want and use. Bonus — you get to watch your paychecks increase without even asking for that raise you deserve!
Joanie is a writer for accountants and a longtime reader of TFD. She considers herself the unofficial seventh member of the Friends cast, a hydrangea aficionado, and an aspiring Chopped champion.
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