Budgeting

5 Tips for Making Better Money Decisions

https://www.cnbc.com/2019/04/09/how-to-make-smarter-financial-decisions.html

According to a CNBC study, more than 75% of Americans manage their own money. But, consumer debt has risen to $4 Trillion. This means more and more people don’t know what they are doing and keep paying for things they don’t need or even really want in order to keep up with the neighbors.

Here are my 5 tips for making better money decisions.

  1. Sleep on it. Wait at least one day to make decisions. Being decisive with your money isn’t always a good thing. Many people in the #debtfreecommunity put things in their Amazon cart and then don’t checkout until a day or two later. That gives you time to think about purchases.
  2. Save for it. When making a big decision, you should always save for it. If you’re thinking of buying a car, start saving a big down payment. You should be paying at least 20% of it in cash. Or, you can even pay for it in full. If you can’t afford to put down 20% of it, can you really afford it?
  3. Plan for emergencies. This one comes up over and over. The survey says that most Americans can’t even afford a $1,000 emergency. But, especially if you own a home or have a big family, these happen all the time. You don’t want all your money decisions forced by emergencies.
  4. Plan for all expenses. Understand your true expenses and plan ahead for how to cover those expenses. If you keep having emergencies, build a fund each month. As you budget, this will get easier.
  5. Make it do. How much of your spending is for wants? The 50-30-20 principle, says 30% of your money should be for wants. This includes shopping, dining out and hobbies. You take your after-taxes paycheck and multiply it by .30 to calculate what 30% of your take-home money is. What could you cut out? What could you use again? What could you make do with?

It’s finally spring and it’s a great time to turn your finances around. I offer zoom appointments to help you get started on fixing your finances. E-mail me through my contact page.

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Budgeting

9 Ways to Lower Cell Phone Bill

When you look at your budget, you might find that your cell phone bill is a major part of your monthly expenses. Yes, we all need one and most people need a reliable one with good service for various reasons. So, I won’t tell you to get rid of yours but here are some ways to cut back.

woman holding iPhone during daytime
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  1. Lower data usage. This is one of the easiest ways to cut back on your cell phone expense. Maybe you don’t need the unlimited plan. You can use Wi-Fi often. You can also go into your settings for each app and turn off background refresh when not using. This is a setting that is easy to click on when you add the app to your phone. But, it means that the app is constantly running and using some data. Even just your e-mail could be using a lot of data by refreshing constantly.
  2. Sign up for a family plan. A family plan paid by different individuals is generally much cheaper than an individual plan. Make sure you trust the person to pay the bill. Pay your part of the bill on time and be willing to help out when the plan goes over on data usage. This is also a great way to have enough people on there to justify the unlimited account.
  3. Sign up for paperless billing or automatic pay. With most carriers, signing up on automatic payment will save you a little money each month. My account is currently shared with my parents and my mom’s card is on the automatic payment. But, I go in before the due date every month and pay my portion of the bill. Then, she only gets charged for her portion. We save $5 a month by using autopay.
  4. Look for extra charges. Don’t pay for insurance on your phone. Invest in a good case and treat it like it’s $500 (it kind of is). If you are worried about something happening to your phone, pay yourself $20/month to have money set aside to buy a new phone. If nothing happens, then you can pay cash for your next phone.
  5. Don’t buy the newest phone. Really examine if you need a new phone. My mom recently got the new iPhone X. Her previous phone was not going to be supported anymore with Verizon. She had had an iPhone 5 for a few years but had had a flip phone before that. It makes sense for her to buy the best phone because she will keep it forever. But, if you want to upgrade just to upgrade all the time, maybe you don’t need the best phone.
  6. Pay cash. Most carriers don’t really charge a different rate if you pay installments or up front for the cell phone. But, if yours does, make sure to pay cash for your phone. Saving up before buying the phone, can lower your monthly expenses.
  7. Don’t pay late. I really hate late fees and avoid them at all costs. Get ahead of your expenses and have the money set aside at least one paycheck before the due date.
  8. No-contract phones. When my teens started, I put them on this great plan called Ting. They use T-Mobile and Sprint towers for service so the service was decent. But, we only paid for the number of calls, text and data used. We could cancel it at any time. But, they learned how to be careful with their usage. If they went over a certain amount, I had them pay the bill. We used it as a great way to teach them about money and paying their own bills.
  9. Change carriers. This one is hard. But, if your cell phone carrier if your cell phone bill is making it hard for you to reach your other goals, you might look into switching carriers. It’s not that painful, I promise. Look at reviews and ask around. My specific area doesn’t always have the best reception, so I have to be careful which carriers I use. Otherwise, I could have very spotty data coverage at my house.

Add up all the long-term costs before you buy. If you’re shopping carriers, you should add up the cost of the phone plus the cost of the service for the year. That puts the total amount in your face instead of just the month-to-month payments.

Remember, your budget is all about the numbers! If you can lower your cell phone bill and make it a smaller part of your budget, you’ll have more money on hand to hit your goals each month—whether that’s throwing more at your debt or saving for your future.Cutting back on your cell phone bill is just one of the many things you can do to free up some extra cash in your budget.” Dave Ramsey

Comment below if you have other ideas to save your cell phone bill. If you need help getting started with your budget, just start somewhere. E-mail me at erin@e3accountingsolutions.com if you have questions.