Tips to Increase Financial Wellness from LSS Financial Counseling
January is Financial Wellness Month! It is also a time when many try to make changes in their lives with New Year’s resolutions – some related to our finances.
If your spending frequently creates a budget deficit, here are several tips from LSS Financial Counseling to cut expenses and increase your financial wellness.
1. Set targets for each spending category
A common spending plan is the 50/30/20 rule: 50% for needs, 30% for wants and 20% for savings and debt repayment. Be sure that your targets are realistic and work for your lifestyle.
2. Reduce your utility bill
There are simple things that you can do every day to help lower your utility bill: turn off lights when you leave a room, before you go to work or on a trip, turn down the heat in the winter or increase the temperature of the air conditioner in the summer, unplug electronics and appliances that don’t have to be on all the time, when replacing lightbulbs and appliances, purchase energy-efficient versions.
3. Use the envelope system
This method involves dividing spending cash among several envelopes for different expenses for a specific period of time. Here is how it works:
- Subtract all fixed expenses (including savings) from your monthly income.
- Take the income left over and divide it among the categories in your budget.
- Label each envelope with a specific spending category and the spending limit. After each payday, put the cash in the envelopes.
- Spend ONLY the cash within each envelope for each category. On your next payday, replenish the envelopes.
- If you don’t spend all the cash in your envelopes, great! Put it into your savings or allocate it to another category where you came up short.
- Adjust the amount for each envelope as needed, especially if you spent less in a certain area. If you overspent somewhere, take a look at your expenses in that category to see if you can cut back.
4. Get rid of unused subscriptions/memberships
Do you have any subscriptions to newspapers or magazines you don’t read? Any paid apps that are obsolete? Not getting the value out of that television streaming service or gym membership? See how much you are spending on items you don’t use and either eliminate them or find cheaper alternatives.
5. Go on a “spending fast”
Don’t spend any money on certain items over a set period of time, like a day or two. It can be easy to fall prey to impulse purchases and overspending, but by “fasting” a few times a month, you can curb that overspending and put that money into savings.
These are only a handful of options! Feel free to implement your own cost-cutting ideas that work for you and your family. Good luck in your efforts to balance your budget, build up savings and increase your financial wellness.
If you are struggling to balance your budget and better manage your expenses, LSS Financial Counseling can help. They will work with you to create a realistic action plan to take control of your financial life.
Being a member TopLine gives you and your family access to up to six (6) free private and confidential financial education counseling sessions annually with a certified consumer credit counselor from LSS Financial Counseling. Sessions are available by phone, in person, or online. Contact LSS today for your free financial education session at 1-800-528-2926 or visit LSS online and mention you are a TopLine member.