The year 2015 is quickly approaching and chances are high that you still have some goals from your last New Years’ resolutions that you have yet to fulfill. Personal finance goals are particularly important to stay on top of, but even if you’ve fallen behind on 2014’s goals, there is still time to make some frugal lifestyle changes before the new year.
Improve Credit Card Management
The economy continues to recover from the Great Recession, but many of us continue to misuse credit as a tool for purchasing things we otherwise wouldn’t be able to afford at the time. Credit card debt looms over the economy like an enormous storm cloud waiting to burst. On an individual level, any amount of credit card debt – compounding each month thanks to relatively high APRs – can pose a burden to the stability of your family’s financial situation and the time is now to reduce it as much as possible. Changes you can make in these next couple months include: pay off the cards with the highest interest rates first, temporarily trim (not eliminate) non-necessity items from your budget to increase the amount of money you have available for debt reduction, renegotiate APRs with your credit card company, pay more with cash to reduce the chance of making impulsive purchases with your credit card, and use whatever cash back rewards you earn from credit card purchases towards statement balances.
Build an Emergency Savings
In addition to paying off credit card debt, establishing or building an emergency savings is critical to protecting yourself and your family from unexpected events that could negatively impact your financial well-being. Most financial experts recommend having at least 4-6 months’ worth of expenses stored in a savings account, but if you’re in the midst of paying off debt, then prioritize debt reduction over building your savings because the interest rate you’re paying on the credit card debt is significantly higher than anything you’ll receive from a standard bank savings account.
One of the easiest ways to reduce your expenditures without making any sacrifices to your lifestyle and buying habits is by clipping coupons for everything from groceries to clothing and home goods. Extreme couponing – the kind you see on TLC where people spend hours and hours each week clipping coupons and paying next to nothing for their groceries at checkout – isn’t for everyone, but adding a couple of couponing apps to your smartphone and frequenting SumoCoupon for promo codes or printable coupons are both great ways to cut back on spending without becoming too stingy with your money.
Reduce Food Expenses
“Food and dining” is one of the most flexible categories in your budget and if you’re aiming for a more frugal lifestyle, then using coupons at restaurants and grocery stores is just the tip of the iceberg when it comes to saving money on food. Buying generic instead of brand name and bulk items instead of individual items are effective means for reducing your food expenses, in addition to eating at home more often and bringing a brown bag to work or school.
What lifestyle changes are you willing to make before the end of 2014?