Jul 12, 2023
You Work Hard for Your Money. Here’s How to Keep More of It.
Save money with free wireless phone service!
If you're resolving to curb your spending and save more money, you're in luck. Small changes can have a big impact.
Sometimes, we find it quite difficult to manage money wisely. However, developing this skill is crucial to attaining financial freedom and stability, and to helping you keep more of your hard-earned money. And the good news is that you can learn how to manage all that money well to never squander or misuse it.
Keep more money: Learn the basics before using your credit card
Make a purchase with your credit card only when you can actually pay the bill in full payment by the end of the month. If you avoid doing so, you will have to pay the late payment fee and end up spending money that you do not even have yet. Never take out cash directly from your credit card, as they make hefty charges on such transactions. If you have absolutely no choice, then transfer it first to your current or savings account and then take out the money.
Work with a financial advisor
The benefits of working with an advisor are numerous. Whether you're looking for help with retirement planning or asset management, a financial advisor will align investment recommendations with your risk tolerance and time horizon. They can also help you monitor your portfolio to ensure it's on track to meet your goals, and help you invest in stocks, bonds, real estate, start-ups, mutual funds, and more.
Set up a budget and watch where you're spending money
Build up your savings and set up an emergency fund that can save you in emergency situations. Otherwise, failing to build up savings can force you to borrow money and pay it back at high-interest rates, negatively impacting your money management strategy. Also, having a general savings account can help you remain financially stable if you lose your job.
How to set up a budget
First, determine how much money you bring in after taxes. This is easy enough to do if you receive a regular paycheck. For the sake of this exercise, let’s pretend you bring home $2,000 a month. Let’s also pretend you bring home another $500 from a side hustle or two. That’s $2,500 a month.
Next, pick a budgeting method
From what I’ve read about the 50/30/20 method, it sounds like the method for me. My mother, on the other hand, has always used the envelope system.
With the 50/30/20 method, you allocate up to 50% of your post-tax income for needs, 30% of your income for things you and your family want, and 20% gets put into your savings account and is also used to pay down debts.
With the envelope system, you get paid, cash your check, and place cash in envelopes you’ve marked “Mortgage,” “Utilities,” “Cell Phone,” etc. and then, when enough cash has accrued to pay a particular bill, you deposit the cash, write a check, and pay the bill. As I said, my mom swore by this system and I know people who still use it. But it means carrying a lot of cash and having a lot of cash in the house. Those things worry me.
Having said that, for the sake of this post, we’re going to work with the 50/30/20 method.
So, what are your needs?
As I mentioned, with the 50/30/20 method, you allocate up to 50% of your post-tax income for needs. Needs are essentials, the things you absolutely must have for living and typically include:
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Groceries.
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Rent or mortgage.
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Utilities.
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Car payment.
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Car insurance.
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Health insurance.
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Child care and/or any other expenses incurred so you can work.
Since we’re pretending you clear $2,500 a month, that’s $1,250 you can spend on needs. Start by writing down each of those categories and assigning a dollar amount to how much you spend on every month. And when it comes to car and mortgage payments, budget for making just the minimum payment allowed. Any more than that should go in the 20%/paying down debts category and for the purposes of getting started, it’s best to work with the minimum payment you can make.
What are the things you want?
As I mentioned, with the 50/30/20 method, you allocate up to 30% of your income for things you and your family want. Again, since we’re pretending you clear $2,500 a month, that’s $750 you can start saving for wants.
Remember, needs are those things that are essential. Wants are things like:
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Take a vacation
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Go to the movies
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Eat dinner out
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Get a monthly manicure
Deciding what’s a “want” and what’s a “need” can be tough. Is a manicure a want? Or maybe it’s a need because you know you have to look a certain way at work. Give this part of your budget serious thought as you develop it. If something looks like a “want” but you know in your stomach it’s a “need,” put it in that category.
Now, let’s save some of your income and use some to pay down debt
With the 50/30/20 method, you allocate up to 20% of your post-tax income and put it toward savings – for retirement, out-of-the-blue expenses, etc. – and paying down debts. With $2,500 in post-tax income, for example, that means you have $500 for this category. I find it easiest to split the 20%, and put 10% ($250) into savings, and the other 10% ($250) in a checking account specifically for paying down credit card, student loan, and other debts.
Budgets… and reality
In the scenario we’ve just gone over, you have $1,250 for monthly needs, $750 for monthly wants, and $500 for monthly savings and to put toward your pending credit card bill. The reality may be though that you need more than $1,250 for your monthly needs and in that case, you need to “borrow” from or, more accurately, not put as much into the other categories. This is normal. Let me say it again: this is normal. This is most likely your first time putting a budget together which means it’s the first reality check about where your money is going that you’ve had. We’ve all been there. Breathe. Now that you see it in black and white, you can do something about it. And you will. And things will improve.
Tools for tracking and managing your budget
Now that you understand how, by using the 50/30/20 method, your post-tax income should be allocated, you need some way of managing that information and charting your progress. You can keep it all in a notebook or create a spreadsheet in Excel or Google Sheets. There are also, as you can imagine, lots of apps dedicated to helping you organize and manage your budget. Personal Capital, Mint, and Goodbudget are three with very good reviews plus they’re FREE. I can’t see the sense in working hard to keep more of my money and paying for an app, but that’s just me. Explore them all and read the reviews then pick the one that works for your needs.
Final thoughts about budgets
Your budget is a tool, and a flexible tool at that, to help you. As your circumstances and priorities change, revisit your budget and make the necessary adjustments. It’s a good idea to review your budget at least once a quarter to see how you’re doing and to pat yourself on the back for making progress.
The next section provides tips on more ways to keep more of your money. Try one. Try five. And put the money you save toward your needs, wants, retirement planning and savings. It all adds up to improving your financial position.
More ways to keep more of your money
Set up automatic transfers
Spend a few minutes on your computer setting up a monthly automatic transfer from your checking account to your savings account and wala! You’re free from thinking about it and worrying if you did or didn’t take it care of it this month (or any month). In addition to alleviating that money worry, you’ll have the pleasure of watching your savings grow as if by magic until one day you discover that vacation you’ve been saving for is ready to be taken.
Keep the change
And I mean keep it. Every day. Empty your pockets and pocketbook of your change at the end of the day and put it in a jar. Do this for 30 days then count it up and deposit it into your savings account. This is by no means a get rich quick scheme, but you’d be amazed at the chunks of cash you can save this way. In fact, one time a long while ago, we needed a new sofa. With a mortgage and two kids, a new sofa wasn’t happening any time soon, I assure you. So I convinced my husband that we should save our change. Every day we put all our coins in a huge planter we named Bertha. (Why Bertha? I honestly can’t recall.) After six months we counted it up and can you believe it – we’d saved almost $2,400. Guess who got a new sofa?
Do a home energy audit
According to the Alliance to Save Energy, the average U.S. household spends $5,550 a year on energy. Purchasing energy-efficient appliances and making certain home improvements will help you start saving more on energy costs.
Cancel those subscriptions
Cable television. Magazines. Gym memberships. Weight loss apps. These and others like them are subscriptions so many of us forget about, but still get charged for. Set aside time to review your credit card statements and checking your bank account and statements and you might be amazed at the number of items you thought you cancelled but are still paying for. Don’t have time to do it yourself? Try Truebill. The site searches forgotten subscriptions on your behalf which is great, but just be aware that for every dollar you save by using the service, Truebill takes 40% as what it calls a “savings fee.” So if they save you $500 annually on a particular bill, they’ll charge you $200. And while you save annually, Truebill takes that $200 fee immediately.
Cut out dining out
Or at least cut down the number of times in a month you dine out. I know how tough this is. Everyone is busy and exhausted. Cooking is the last thing you want to do after working all day. It’s just so much easier to say “let’s eat out tonight!” But I’ll tell you, you can save some real money by cutting restaurant meals out – or at least down. And when you do dine out, consider ordering appetizers only or sharing an entrée with your dinner companion. To save even more, skip the drinks and the dessert. (You can always have those at home!)
Switch – or ditch – your cell phone carrier
If you’ve never considered looking into free cellular service, this is the perfect time. Life Wireless offers government subsidized cellular services through the Affordable Connectivity Program to qualifying individuals and families. And, if you’re unemployed or participate in a government benefit program such as SNAP, Medicaid, Federal Public Housing Assistance, SSI, or WIC, you already qualify for this Federally funded free cellular service. As a participant, you receive the following, free, each month: Unlimited talk, text and data*, and a free smartphone or you can bring your own.
Even if you’re paying just $20 a month for cell service, wouldn’t you rather have that $240 to spend on the needs highlighted in your budget or to put toward paying down debts? It takes just a few minutes to complete the application. Do so now, and you could be cutting your monthly cell phone bill to nothing in no time.
Plus, if you’re approved for Life Wireless/Lifeline Assistance Program and sign up for the Affordable Connectivity Program (ACP), you get two sources of free talk, text, and unlimited data that you can split between two phones. That means free cell service for you and free cell service for someone you love. If your child has been asking for a cell phone, this is a terrific opportunity to provide him or her with talk, text, unlimited data and the ability to stay in touch with you!
Of course you don’t have to split the service between two phones, you can keep it all on one. But it’s a wonderful option if your spouse, child or relative needs a phone – and who doesn’t? – but has been unable to get one due to the expense.
Whichever option you choose – to keep the data on one phone or split it between two – Life Wireless will make sure you receive the free talk, text, and unlimited data to help you stay connected.
Keep more of your hard-earned money with Life Wireless. Start now!
Posted 1 year ago