I’ve just got married, and hence my finances (or what is left of them) are a little more constrained. So naturally I have been neck-deep in bills like never before. But what this means is that I have first hand experience with saving money while spending money. That sounds a bit weird but that’s the way it is. Life is about balances, and your financial life is all about how you can balance your outgoings with your incomings.
For what it’s worth, here are a few tried and tested tips that have really helped me.
- Planning your finances
When you have a mortgage to pay and a slew of monthly recurring bills you can clearly see how important it is to plan ahead. What I would recommend is to contact all the companies (mortgage lender, loan companies, credit card companies etc.) and ask them to change your billing date to the start of the month when you pay arrives. This means that you can see exactly what has come into your bank account, sadly followed by what has just left. You will then have a clear picture of the money available to you for the rest of that month. And that means security.For planning Web 2.0 style I recommend Google Calendar – use this online, fully-AJAXed, iCal-compatible and free service to plan your month. Enter important dates such as when final payments on loans are due, when your mortgage payment goes out and when your pay comes in.
Now that you have established how much money you have, you can budget for that month. Work out how much you need for the necessities such as food, transport costs. Once you have the total calculated, withdraw that amount in cash and use it alone. You’ll find that it will be much more difficult to throw away a few notes compared to spending with a piece of plastic. Discipline yourself to stick to what you have, avoid expensive nights out and luxuries that are not essential. Budget for at least one treat in the month, without this you will lose focus quickly and your budget will soon be in tatters.
So you’ve now planned out your incoming and outgoing funds, which has also given you the grounds to budget for the month. Great! Now you need to track what you spend. And by that I mean, track everything. Going to the cinema, track how much you spent on your tickets and popcorn. Filling up with fuel, keep a tab on how much you spent. The idea is to track in detail so you can spot trends, which you can then use constructively to help save more money.Use Google Spreadsheets (a free online spreadsheet app) to view, edit and save your spreadsheets, including .xls files produced by Microsoft Excel. Now you’ll be able to see exactly what’s happening with your finances wherever you are.
- Interact with others
If you are in a position where money is hard to come by, talk to others about your problems. And what better way to do it than with a blog? Setting up your own blog is easy and cheap. There are many benefits, such as interacting with others who have previous experience with saving money and wealth building. But I think that perhaps the strongest reason you should start blogging about your quest to save money is that you will gain a lot of motivation. One of the recurring things I hear when reading blogs about debt and finance is that the author often feels obliged to keep on budget, even when tempted, because of a loyalty to the readership. Instead of spending your money, blogging will give you some much needed motivation to keep on target.WordPress is easy to setup with your own domain name and is highly customizable to look the way you want it. It also just works. For someone who has absolutely no technical know-how, try TypePad – no installation or technical knowledge required. TypePad also offers a big community off the bat.
- Collaborate with friends and partners
You know the old saying, a problem shared is a problem halved. If you are aiming to save money with your other half, then you need to stay informed of what eachother is doing. It’s easy for your wife or girlfriend to run downtown and rack up a bill on handbags and shoes, never mind the damage you can do in the Apple Store! So keep on top of what you are doing financially, share your information. Let eachother know when bills are due so you don’t get penalized, or even worse, default into interest payments for eternity!For me there is nothing better than BackPack for managing information, creating todo lists, store your budget spreadsheet etc.
If you know of other Web 2.0 services that are suited to helping me / you save money I’d be really interested in hearing from you. Drop a comment and share your thoughts.