You ate your grapes after counting down with, Pitbull on TV performing in Miami’s Bayfront park. You swore off fat and excessive spending, just like every other year. What are you going to do differently this year? Exercise more and save more; got it. Well since that obviously didn’t work for you last year, I’m going to tell you what to do differently this year. Set a goal and hold yourself accountable. Make it attainable, make it easy, and track it so you can celebrate your progress.
In 2014 some of the common mistakes people made that hindered their financial and exercise goals were, creating a plan (or lack thereof) that was impossible to attain and, hard to stay motivated with. The majority of us are too busy with work goals that are set by over zealous managers and shareholders so we bench our personal goals. We relax on the couch when we should be at the gym, we spend to unwind when we should be saving.
Here are some of my own mistakes for 2014.
Spending too much on my car. I leased a childhood dream car instead of, opting for an entry level economical car, or something used. I justified the expense because it was cheaper than my previous gas guzzling RWD Coupe. I thought I was better off. After all, I was saving $20 a month and, my new car is cheaper to maintain. My mistake was comparing my current situation with my previous one instead of following a financial plan. 2015 is different, I have a plan.
Ate out way too much. According to mint.com, my wife and I spent an average of $1318.00 on Food every month. 34% of that was on groceries. The rest was on restaurants, bars, and fast food. 2% was in coffee shops. Depending on where you frequent for food, your spending can be cut considerably by just cooking at home. For pete’s sake, you do not have to eat at home just because you cooked at home. Go OUTSIDE. You can have a cute picnic at a park, you can take sandwiches to the beach, you can eat at home and then go to a restaurant for desert or soup. Cooking more at home does not mean that you have to become a hermit. Pot lucks are more cost effective, for everyone, than a big dinner party at any of the 305’s finest restaurants.
Forgetting to pay down debt. How the hell does that happen? Well you see, at the beginning of the year my wife and I were still adjusting to shared accounts and spending habits. We didn’t have a plan. We shared our income but we didn’t share our credit card debt. To build our emergency fund (3-6 months of non-discretionary spending), we started paying minimum payments on our credit cards and saving the cash. Once we built our savings we kinda just… forgot to go back to paying down our debt. We figured as long as we stopped using our credit cards, we were still progressing. Stupid, stupid, stupid mistake that cost us about $1000 of interest charges for 2014. For 2015 we’re using our savings from tightening up spending to pay off our credit card debt by March. We’re also going to start maximizing our credit card churning to fund our dream vacation to Spain in September. Most importantly, we put it down on paper and made changes to our budget to get us there.
So my friends, What are your goals? How is your bank a part of them? Does your banker support you?