After you’ve committed to smart money management, you’ve taken an important first step toward achieving your financial goals. Now that you have a good idea of your personal finances and the financial goals you want to achieve, you can start working toward your endgame.
Whether it’s funding a 529 college savings plan, purchasing your first home, or building a retirement fund, this objective will help you structure your financial planning approach to best meet your needs. At the same time, you’ll want to be aware of the finer points of cost-cutting and long-term budget maintenance.
The Art of Cutting Costs
Once you’ve taken stock of your monthly expenses and prioritized them, the next step in budget planning is to seek out creative ways to save. Start by canceling unnecessary costs, like subscriptions or memberships you’re not using, shop around for better insurance rates, and see if you are paying the lowest internet access rates available. Sometimes 30 minutes on the phone can save you hundreds a year.
Consider tackling one account a week until you’ve settled on the best deal. Other potential opportunities to save are debt consolidation and refinancing your auto loan or home mortgage, as refinancing benefits can be considerable. Additional cost-cutting opportunities may include switching from disposable to reusable items, buying generic store items instead of brand names, and meal prepping your lunches.
Making It Stick
When it comes to personal finance, it’s important to make changes—but it’s even more important to make changes that truly last. All too often, when we try to make too many major changes at once, they can be hard to sustain and we eventually drift back to our old patterns. Instead, begin with small, incremental adjustments, and over time, layer on additional savings measures.
When you have your three-month emergency fund, consider creating a “start small” savings account and allocating 5 percent of every paycheck to that account. Create a year-forward budget (from now until next year), including back-to-school expenses and vacations, and remember that rewarding yourself for a job well done can be great motivation to continue on your financial planning journey.
Setting Yourself Up for Long-Term Success
At Gravity Lending, we can help you access the most affordable financing options so you can achieve your financial goals and enjoy long-term success. To get started, contact us today!