2 Best Places to Start Fixing Your Finances

When I first started trying to get my finances under control, I had no idea where to start. I tried to follow a patchwork of ideas like pay yourself first and only spend X percent of your income on rent, but at the end of the month there would always be more month than money. I couldn’t figure out what I was doing wrong until someone asked where my money was going every month. Aside from food, rent, cell phone and credit card payments, I had absolutely no idea. It was such a simple question and the answer ended up keying my turn-around financially but it took me a while to realize that mattered.

So if you’re trying to turn your finances around and save a bit of money every month instead of wondering where it all went, here are the 2 best places to start fixing your finances.

Fixing your financesTrack What You Spend

As I found out, the most important thing is tracking your finances. When I started turning my ship around, there wasnt a lot of good financial tracking software like their is now. I started with a blank sheet of paper and a stack of bills, working those and my online logins to figure out how much I was spending every month. It’s much easier now, with the online trackers for your finances such as mint and apps that are more investment focused, like personal capital. Once you start tracking your income and expenses, you’ll know where you need to cut and how much you can use to save or pay off debt each month.

Cut the Excessive Expenses

Once you get your expenses written down, I’ve found it’s most valuable to lower your structural expenses as much as possible at first. This includes things like rent, car payments, car insurance, electricity, water, cell phones and cable tv. I’ve found that many people way overpay for cable TV (Calling up and getting a discount usually works wonders) and if they switch to an MNVO like ting or republic wireless they can usually lower their phone bill by 66% or more per month. For a family of 2 if they switched phones and totally ditched cable, that’s an immediate savings of 200+ per month. Once that’s done, add all that money to your savings or debt repayment. Then it’s time to move on to your car expenses. Consider selling your car and trading in for a cheaper one that you own outright, and can carry less insurance on. This will get rid of your car payment completely and hopefully lower your insurance by a significant amount as well. Better yet, try getting a bike and getting rid of your car completely.

In my opinion, those are the low hanging fruit – things you can easily change and your day to day existence wont be changed much one way or the other. The best part about this is you can spend a day or 2 over the course of a week and you should be able to easily pocket 500+ per month in savings – that’s 6,000 per year! Like you, I could use the extra 6k per year.

Once you get your structural issues fixed in your finances, it’s time to move on to your habitual purchases. Is there anything that you spend too much money on and dont get a lot of value from? Do you spend too much on fast food, or alcohol? Or maybe you buy too many books you’ll never be able to read, or too many movies on blue-ray you cant watch?

Now is the time to deal with those, and the easiest way that i’ve found is to get a budget set up and spend that in cash every month. Say you want to limit your blu-ray purchases to 25 bucks per month – get that amount in cash at the beginning of the month, then when the cash is no, no more blu-ray until your cash re-ups at the beginning of the month.

Would You Consider Moving to Improve Your Standard of Living?

Last July, our family moved from the near suburbs of Chicago to the suburbs of Tucson, Arizona.  We knew that there would be some significant changes to get used to, like the change in weather, but honestly, we weren’t sure how our lives would change.

Had my husband not been offered a job in Tucson, we never would have considered moving so far away from family and friends.  However, making this move turned out to be a wonderful decision.

Even though my husband is only making $2,000 more than he was making in Chicago, our quality of life has improved tremendously.

Benefits of Moving to Tucson

Moving improve Standard of Living

Original img credit: pbarry on Flickr

We can own a house.  In the near suburbs of Chicago where we lived, a house, even a fixer-upper, cost at least $300,000.  Then, there were the property taxes to consider, which ran $10,000 to $25,000 a YEAR depending on the neighborhood you live in.  In Tucson, we got a very nice house for less than $200,000, and our taxes are only $2,000 a year.

Our kids have room to play.  Even though we lived in the suburbs of Chicago, the population is so dense that the houses all have very small yards.  Plus, the house that we rented backed up to an alley, so I never dared leave the kids outside alone.  Now, we have a large backyard with a cement fence around it.  I can see the kids outside playing while I’m in the kitchen preparing food.  We love this feature of our new home.

Money stretches so much further in Tucson.  Although it’s a challenge, in Tucson, I have a grocery limit of $125 a week.  There is absolutely no way I could have such a low grocery bill in Chicago.  It simply was not possible.  Gas here is much cheaper, too.

The environment is so much quieter and friendlier.  In Chicago, many people were just, well, grouchy.  (Not all of them, but certainly enough of them.)  We lived in a middle class suburb, and we had some sketchy characters in our neighborhood like a woman who lived down the alley and routinely dug through everyone’s trash.  (I’m not making that up!)  There was also so much noise from the nearby fire station, trains, and constant traffic.  In Tucson, our neighbors are very friendly, there is no one sketchy (that we’ve met so far), and it’s much, much quieter here.

Drawbacks to Our Move

We’re far away from family and friends.  Most of them live in the Midwest, so we are far, far from family and friends.  That is a challenge.  If we move back to the Midwest, it will be because we want to be closer to family and friends.

Everything is so far away.  In Chicago, I was very spoiled.  I had three grocery stores within a two mile drive.  Our dentist and doctor were each less than 4 miles away.  In Tucson, everything is 10 or more miles away.  We have to drive a half an hour to get to our dentist.  Driving so much can take up a large part of our time.

I never would have considered moving to improve our standard of living, but now that we’ve done so, I can see what a great move it was for our family.  Our quality of life has improved dramatically, and this move is giving us a chance to improve our financial situation.

Would you, or have you, moved far away to improve your standard of living and financial situation?  Or is this something you would not consider?

3 Easy Ways to Get a Home Cooked Meal on the Table: Save Time and Money

Do you cook at home?  If so, how many times a week?

Chances are, your answer will vary depending on whether or not you work outside the home, your age, and your income.

Sure, cooking at home can save you plenty of money, but not a lot of us do it.  According to Harris Interactive, “Two in five (41%) say they prepare meals at home five or more times a week and three in ten (29%) do so three to four times a week.  One in five (19%) of U.S. adults prepare meals at home one to two times a week, and 11% say they rarely or never prepare meals at home.” There aren’t always easy ways to get a home cooked meal on the table.

In the last several years, my husband and I have made the switch to exclusively eating at home.  We go out to eat less than 10 times a year, usually only when we’re traveling.  What I’ve discovered is that cooking at home can actually be A LOT of work.  Making healthy, low-cost food requires time and energy, and then there is all of the clean up to do afterwards.  If I were still working full-time outside the home, I doubt that I would have time to cook as much as I do now.

Home Cooked Meal

Original IMG credit: DSC_0719 on Flickr

However, there are a number of strategies that can help make preparing foods at home easier.

Have a go to meal.  Everyone should have a few easy meals that they can make from staples in the pantry when they’re short on time.  Choices might include spaghetti, cheese quesadillas, grilled cheese sandwiches, etc.  These meals may not be ideal nutritionally, but they’re still better than grabbing fast food, and they’ll save your wallet.

Use your slow cooker.  Start the slow cooker in the morning, and when you come home, you’ll have a hot meal waiting for you.  To save even more time, prep all of the ingredients the night before so in the busy morning, you can just dump in the ingredients and go.

Utilize freezer cooking.  Take one day a month and cook up several meals for your family for the month.  This might take you three to four hours, but then you will eliminate much of the cooking you’ll need to do for the rest of the month.  Simply take a meal out of your freezer the night before you need it and then reheat it when you get home from work.

There are short cuts to freezer meals, too.  Search Pinterest, and you’ll find crockpot freezer meals.  Simply dump the ingredients in a freezer bag and freeze.  This type of freezer cooking doesn’t require any cooking before putting it in the slow cooker, so you can make a month’s worth of meals in about an hour.

Another idea is to double any recipe you are already cooking and put the second one in the freezer for a busy night.

Don’t be discouraged if you haven’t yet mastered how to eat at home without spending all of your time cooking.  As Marion Nestle, professor of food studies at New York University and author of What to Eat says, “Anything that you do that’s not fast food is terrific; cooking once a week is far better than not cooking at all.  It’s the same argument as exercise: more is better than less and some is better than none” (The New York Times).

What is your favorite strategy to get a healthy meal on the table quickly?