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Money Woes? 5 Financial Cures for 2015

By HERWriter
 
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5 Financial Cures for Money Woes in 2015 Auremar/PhotoSpin

How is your financial health? Are the last few days before payday as calm as the first few days after? Are you paying off your credit balances each month?

If any of these questions makes your stomach hurt, perhaps it’s time for a financial tuneup.

1) Create a zero-based budget.

Do you ask yourself, “Where did it all go?” Do you feel flush, restrain yourself from impulse buys, and still find yourself out of money at the end of the month? Pin those dollars down before payday. Name every dollar that is headed into your bank account before it has a chance to get out.

In my family, we do this in an Excel spreadsheet. You can watch a tutorial on how to set one up here.

We list our income for the month and all of our expenses, for example, Mortgage, Gas, Utilities, Food, Medical Co-pays, Haircuts, etc. After your essentials are accounted for, relegate some money to savings.

Lastly, budget for luxuries: movie tickets, fancy coffee, eating out.

The bad news? When payday arrives, there is no rush of elation, no spending spree, no new purse, unless that purse is named in the budget.

The good news? Your money goes exactly where you told it to.

Financial guru Dave Ramsey explains how a zero-based budget works here.

2) Create an emergency fund.

Does a flat tire, sudden furnace repair or surprise medical bill have the power to turn your world upside down? Start working on an emergency fund, a minimum of $1,000 saved exclusively for the unexpected.

Your zero-based budget can help. If you have money left over after expenses, put an “emergency fund” row in that spread sheet, and divert any extra dollars here.

A birthday card from your aunt with $20? Put it in the emergency fund.

A bonus check? Extra tips at work? Tax refund? Put them in the emergency fund.

If things are too tight to put anything towards savings, get creative. Have a cluttered garage? Start listing items on craigslist or have a yard sale.

3) Cut up your credit cards and carry cash.

"But what about my credit card rewards?" As Luke Landes wrote in Forbes, “banks will do everything legally possible to cause you to make a mistake with your rewards. Just one mistake, like needing to pay interest one month, undermines the advantage of credit card rewards.”

Banks don’t offer rewards programs out of the kindness of their hearts. They offer rewards in order to convince you to use a credit card, because banks know what science has proven — we spend more money when using credit cards than when using cash. The interest on those splurges we otherwise wouldn’t have made is the banks’ bread and butter.

4) Cook. Yep, just cook.

Go to your online banking site now, and review how much you spent on fast food and restaurants in the past month. Does it add up to more than $4 a day?

Visit Good and Cheap, an ad-free website dedicated to inexpensive, healthy meals.

Written as the final project for her master’s thesis in food studies at New York University, Leanne Brown wrote these recipes for those on tight budgets, especially those who subsist on food stamp budgets of $4 a day.

You can download the recipes for free — seriously, free! — or preorder a copy at Amazon. With every copy of Good and Cheap purchased, a second copy will be given to a person or family in need.

5) Take a long, hard look at your car.

In our culture, our cars are inextricably linked to our image of ourselves as successful, regardless of whether or not we can actually afford them. As Dave Ramsey so delicately puts it, “You make $50,000 a year and you own a $60,000 car? That’s insane.”

If your car payment is weighing you down, and your loan-to-value ratio isn’t upside down, consider cutting yourself free and selling it. You can get a loan on a less expensive car, or continue saving all that cash and buy a used car before ditching that big, fat payment.

Reducing a two-car household to one can work with patient planning and sharing the car, carpooling with co-workers, public transportation, bicycling or Uber.

Let me know if any of these suggested cures work for you!

Sources:

Say No to New Cars. DaveRamsey.com. Retrieved January 13, 2013.
http://www.daveramsey.com/article/saying-no-to-new-cars/lifeandmoney_automobiles

Credit Card Basics: Everything You Should Know. forbes.com. Retrieved January 13, 2013.
http://www.forbes.com/sites/moneybuilder/2013/06/11/credit-card-basics-everything-you-should-know/2

Reviewed January 15, 2015
by Michele Blacksberg RN
Edited by Jody Smith

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We value and respect our HERWriters' experiences, but everyone is different. Many of our writers are speaking from personal experience, and what's worked for them may not work for you. Their articles are not a substitute for medical advice, although we hope you can gain knowledge from their insight.

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