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Now that 2022 is officially in full swing, you’re ready to start a slightly non-traditional diet – one that is focused on your finances. Specifically, you want to find ways to cut your spending in order to improve your financial health and stability in the New Year.
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Of course, that doesn’t mean you still can’t indulge yourself, you just need to be more selective about your spending. Here’s a look at five financial diet tips from financial management experts to help you get your budget in shape.
Limit your bar tab
Almost everyone has been there, what was supposed to be a few drinks with friends turned into a bar so filling you think you see things. One of those nights probably won’t ruin your finances, but making it a habit can really make debt worse.
“Where I typically find excess fat in a client’s financial diet is actually a big overlap with physical well-being – bars and drinks,” said Nathaniel Hoskin, CFP®, Founder and Director of investments of the investment management company Hoskin Capital. “Whether a customer is 25 or 65, it’s extremely common for them to overspend on alcoholic drinks and parties. “
Fortunately, Hoskin said finding a balance is a very easy solution. Specifically, he said that sharing a bottle of something – that is, wine – with friends before heading to town can save up to $ 50 per night. He noted that this can quickly add up to hundreds of dollars per month, which equates to thousands of savings per year.
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Cut unnecessary subscriptions
In a traditional diet, it’s always advisable to avoid mindless eating, as it doesn’t make sense to waste calories on foods you don’t even enjoy. This also applies to a financial plan, as there is no point in paying for subscriptions that you are not using.
“Once you’ve added all of those streaming services, the logs [and/or] news sources and even fitness and diet apps, these small fees can run up to over $ 1,000 a year, ”Hoskin said.
He said most credit card companies have tools to help you track your subscriptions in their app.
“Going through them all and deciding which ones are really needed will add money to your pocket and expand your wallet a bit more,” he said.
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Monitor impulse purchases
Just like a few mindless calories here and there can keep you from reaching your weight loss goal, making impulse purchases a habit can hamper your financial goals.
“These are usually under $ 20 and can be anything from potato chips to a new cup,” Hoskin said. “When I go through a monthly statement with a customer, they can often find up to $ 200 in purchases that they wanted but didn’t really need. “
Adding up your impulse buys each month can open your eyes, he said.
“This practice helps you become more aware of your spending habits, which is a sure-fire way to save money in the future,” he said. “It’s also a great way to exercise your self-discipline muscles, making it easier to make the same smart decision on the road, no matter what the temptation. “
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Pay off credit card debt
It’s hard to move forward with your financial goals when you’re overwhelmed by high credit card balances.
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“Reduce the weight of credit cards in your wallet to just one, to help reduce debt over time,” said Adam Deady, CFP, consultant at MassMutual. “To get started, prioritize the order you pay for your various credit card balances.
Like Dieting, he said this approach to paying off credit card debt will help keep you motivated because you can track your progress.
“You can do this by making the minimum payment on each card and then attacking the card with the lowest balance first by paying as much as you can afford,” he said. “Then repeat this step for the next card balance. Or you and make the minimum payment on each card, then attack the card with the highest interest rate.
It will take some serious commitment on your part, but imagine how much lighter you will feel when the debt is finally gone.
Read: 37 Life Tips That Will Save You Money
Negotiate new rates with service providers
You have to eat to live, so dieting is about adopting healthier habits, like learning to stop overeating. Likewise, you probably have at least a few services that you need, but that doesn’t mean you have to pay a premium for them.
Ahren Tiller, founder and supervising attorney at Bankruptcy Law Center, a law firm with multiple offices in Southern California, said service providers are often willing to negotiate a lower rate if they know you are considering switch to a competitor.
“In fact, most large companies have a specific department for retaining current customers,” he said. “They know the cost of acquiring a new customer is greater than the cost of retaining a customer, which is why they often lower your rate in order to keep you happy. ”
You won’t know if it works until you try it, so calling customer service might help lower your monthly bills.
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