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You Won’t Die if You Don’t Buy. Here’s Why.

You Won’t Die if You Don’t Buy. Here’s Why.

Are you grappling with finances? Advice on how to make money is everywhere – from investment planners, successful start-up CFOs, online gurus, and self-proclaimed experts sitting next to you at the bar. They’re all focused on getting more income into your wallet, which is great! But no one talks much about where your money disappears to. I’m not offering a complicated output analysis or turning you into a miser. Consider these suggestions to keep expenses in check. Whenever you’re tempted to purchase on  impulse, I’ll be the voice in your head that asks ,”Will you die if you don’t buy?”

Here’s an interesting statistic: Black Friday is a peak U.S. shopping day. A National Retail Federation Research shows the total spent on Black Friday in 2013 was a staggering US $57 Billion! That’s a lot of buying.

Let’s begin with questions that help you find and plug the holes in your wallet.

1.  What do you spend the most money on?

You won’t forget the restaurant bill last weekend anytime soon but how much in any given month goes to groceries, eating out, fuel/car maintenance, the children and school-related expenses? Numbers in black and white jolt you with a picture of your spending patterns. You’ll know your monthly expense totals per spending category and payment medium like cash, credit card, or check payments. You can then plan which areas to cut down on. You’ll also see exactly why your expense total shot up. If you don’t buy unnecessarily, you’ll stay within limits.

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Tracking expenses requires that you keep all receipts and spend some time once a month to record and add them up. Initially, you need to prepare customized templates using any spread sheet – one form for cash payments, the other for credit card and check payments. Tally your expenses by relevant categories such as groceries, eating out, phone and other utilities, car, etc.

2.  Do you know how much money you have?

Sure you know how much you make and yes, you have money squared away, but do you make sure there is money left after paying your monthly bills? Again, recording your funds in black and white guides you to prioritize your necessary expenses. Don’t buy anything else if your funds are low.

3.  Are you able to pay your credit card bills in full?

If the answer is no, don’t use one. In her book Women and Money: Owning the Power to Control Your Destiny,” Suze Orman describes this as “the downward spiral of paying less than the entire bill and being charged interest on everything you don’t pay off.” Imagine if you had multiple credit cards! Interest on credit card debt is an expense you can avoid. Don’t buy on credit if you cannot  pay  the statement amount in full each month.

4.  Do you know when bills are due?

It’s when bills catch you by surprise that you hastily issue a check and don’t realize that it is not supported by your account balance. Or else, you opt to pay the bill late. You get slapped a penalty for issuing a bad check or you pay interest for late payment. Both are avoidable.  Prepare a monthly and yearly schedule that shows when mortgage, taxes, insurance, school fees, and utility payments are due. Don’t buy at all on the week or month when big payments are scheduled.

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5.  Don’t buy before asking, “What if?”

You’re thinking of buying a new outfit for a close friend’s wedding. What if you look deep into your closet for that cocktail dress you hardly used and jazz it up with a glittery wrap?  What if you borrow a dress from your sister? You want to buy a new grass cutter and a tent for monthly barbeques. What if you rent instead? You’re shopping for a present for your favorite aunt. What if you make her a bead necklace or an embroidered pillowcase? It’s your hobby and you have the materials already! Buying is not the only option.

6.  Mindful shopping can be guiltless, rewarding, and fun.

Review your intention and answer these questions.

Why? Shop only to buy something that’s needed or to get a treat you’ve been saving up for.

How? Make a list and keep to it. Learn the discipline of buying only one major thing at a time. Don’t buy an expensive pair of shoes plus an outfit or a bag at the same time. It builds restraint and guards your cash flow.

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When? Shop only when you can afford to. It’s best to time it during a sale. Don’t go shopping every weekend or simply because there’s a sale. That’s the reason you have a closet full of unused stuff and higher-than-usual expense.

With whom? Don’t shop in a group. You’ll end up with purchases made from getting carried away. Maybe someone else bought it or somebody said “Buy it. It’s such a good deal!” It’s hard to think clearly with opinions flying about, but going with a level-headed friend can curb your impulses.

Working as hotel expatriates, a group of 5 of us single women often shopped together. We were of the same built and shoe size. We bought – in one go – similar outfits and shoes in varying colors and styles. It was really fun but even then, I was the voice of reason (and party pooper) always asking “Will we die if we don’t buy?”

What? Buy the original. Go for quality and versatility. Be willing to pay expensively. The number of times and ways you’ll use good-quality things will be worth their price. There is no real excuse to buy knock-offs or pirated stuff which don’t last and add to landfills. Instead, save up and buy the original or choose good quality, unbranded products. Never buy products from endangered species. Animals should not unduly die just so you can buy.

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Where? Have a list of personally preferred brands you use and shops you buy from on the basis of quality of product and service. This builds relationship and rewards. It also keeps you from unscheduled purchases in random places.

Who? Consider the makers’ and sellers’ corporate social responsibility record: do they pay fair wages, sustain the environment, minimize waste, and give back to the community? Choose to spend your money in support of people who’re doing good things.

By sticking to a set of criteria, you simplify buying decisions and actually save money. Check out these other money-saving enjoyable experiences, too.

7.  Do you block the flow?

Doing all these suggestions could reveal you’re not doing so badly, financially. Don’t forget other people who are not doing so well financially and be willing to help them out. Help could be in the form of a small monthly donation or a one-time donation to a cause you care about. Or it could be a loan to a struggling friend. Be part of the flow and respect the law of abundance. When you cascade some of what you have to others, you also make space in your wallet for more.

Featured photo credit: cohdra via morguefile.com

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Last Updated on January 2, 2019

How Personal Finance Software Helps You Get More Out of Your Money

How Personal Finance Software Helps You Get More Out of Your Money

Do you know what mental health experts point to as the biggest cause of stress in the United States today? If you said “money,” then ding, ding, we have a winner!

Three out of four adults today report feeling stressed out about money at least part of the time. People are either worried about not having enough money or whether they’re putting the money they do have to use in the best possible way.

Your money is either in charge of you or you’re in charge of it, there’s no middle ground. Using some type of personal finance software can help alleviate some of that money stress and better allow you to manage your money effectively. Without it, you may just be setting yourself up for constant financial worry. Life is already tough enough and there’s no need to make it more difficult by simply hoping your money issues will all work out in your favor. Hint: they won’t.

This guide will help you to understand how personal finance software can better assist with both accomplishing long term financial goals and managing day-to-day aspects of life.

Whether it’s tracking the savings plan for your child’s college fund or making sure you won’t be in the red with the month’s grocery budget, personal finance software keeps all this information in one convenient place.

What Exactly is Personal Finance Software?

Think of it like the dashboard in your car. You have a speedometer to tell you how fast you’re going, an odometer to tell you how far you’ve traveled, and then other gauges to tell you things like how much gas is in the tank and your engine temperature. Personal finance software is essentially the same thing for your money.

When you install this software on your computer, tablet, or smartphone, it helps to track your money — how much is going in, how much is going out, and its growth. Most personal finance software programs will display your budget, spending, investments, bills, savings accounts, and even retirement plans, levels of debt, and credit score.

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How It Leads to Financial Improvement

It shouldn’t come as a surprise, but people who regularly monitor their finances end up wealthier than those who don’t. When you were a kid, keeping track of all of your money in a porcelain piggy bank was pretty easy. As we get older, though, our money becomes spread out across things like car payments, mortgages, retirement funds, taxes, and other investments and debts. All of these things make keeping track of our money a lot more complicated.

Some types of personal finance software can help make things a little less complicated, setting you up to meet financial goals and taking away some of the stress associated with money.

Even if you already have a Certified Financial Planner (CFP) some type of personal finance software can be of great benefit. Whereas CFPs focus on the big picture of your money, they don’t handle the day-to-day aspects that determine your overall financial health.

It’s also not nearly as complicated as you might think and can take out a lot of the tedium that comes with doing everything on an Excel spreadsheet or with a pad and pencil.

Types of Personal Finance Software

When it comes to personal finance software, it generally fits into two categories: tax preparation and money management.

Tax preparation software such as Turbo Tax and H&R Block’s software can help with everything from filing income taxes to IRS rules and regulations and even estate plans. Plus, there’s the benefit of filing online and getting your refund check a lot faster than if you were to mail off your forms after waiting in line at the post office.

For the purpose of this article, however, will be focusing more on the personal finance software that aids with money management.

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Money management personal finance software will help you to see the health of your cash flow, pay down debt, forecast for expenses and savings, track investments, pay bills, and do a host of other things that 30 years ago would have practically required a team of accountants.

When to Use Personal Finance Software

So far we’ve gone over what exactly personal finance software is and how it can be a benefit to your money. The next logical step in this whole equation is determining when it should be used and how is the best way to go about getting started using it.

Below are four of the most common and practical ways to use personal finance software. If all or any of these apply to you and your money, then downloading some type of personal finance software is going to be a smart move.

1. You Have Multiple Accounts

There’s a good chance that when it comes to your money, it’s in more than one place. Sure, you probably have a checking account, but you may also have a savings account, money market account, and retirement accounts such as an IRA or 401k.

If you’re like the average American, you probably have two to three credit cards as well. Fifty percent of Americans also don’t have loyalty to just one bank and spread their money across multiple banks.

Rather than spending hours typing in every detail of every account you have into a spreadsheet, many programs allow you to easily import your account information. This will help to eliminate any mistakes and give you a bird’s eye view of everything at once.

2. You Want to Automate Some or All of Your Payments

Please don’t say that you’re still writing out paper checks and dropping each bill in the mailbox. While it’s noble that you’re doing your part to keep postal workers employed, we’re 18 years into the 21st century and you can literally pay every bill online now.

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There’s no need to log into every account you have and type in your routing number either.

With personal finance software you can schedule automatic payments and transfers between all of your imported accounts. Automatic transfers will help to make sure you have the necessary funds in the right account to ensure all bills are paid on the appropriate date. Late fees are annoying and do nothing but cost you money. It’s time that you said goodbye to them once and for all.

3. You Need to Streamline Your Budget

Perhaps the best feature of personal finance software is that it allows you track everything going in and out of your virtual wallet.

Nearly every brand of personal finance software out there has easy-to-read graphs and charts that allow you track every cent you spend or earn, should you choose. You might be pretty amazed when you see just how much you spent on eating out last month or if you splurged a little more than you should have on Christmas gifts last year.

Every successful business on the planet has a budget and using personal finance software can help you trim the fat on your spending in ways that affect your everyday life.

4. You Have Specific Goals to Meet

Maybe it’s paying off debt or saving for up something like a European vacation. Whatever your financial goal is, whether it’s long-term or short-term, personal finance software programs are one of the savviest ways to go about reaching those goals.

You can do everything from set spending alerts to notify you when you’re over budget to automating what percentage of your paycheck goes to things like retirement investments. The personal finance software that you choose should show you exactly how close you are to hitting those goals at any given time.

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How to Get Started

From AceMoney to Mint and Quicken, there ’s no shortage of personal finance software apps out there. Many of these programs are free to download and will allow you to pay bills, invest, monitor your net worth and credit profile, and even get a loan with the swipe of a finger.

Other programs may only offer you limited services and will require a one-time fee or subscription to unlock all that they offer. These fees can often vary from as little as two dollars to 50 bucks a month.

It’s best to start off with the free version and then gauge whether you’re able to accomplish everything you’d like or if it’s worth exploring one of the paid options. Often times the subscription programs come with assistance from financial planning and investment experts — so that can be a real benefit.

When deciding which personal finance software program to use, it’s also important to look at how many accounts you wish to monitor. Certain programs limit the number of accounts you can add. Be sure that if you have checking, credit card, and investment accounts to monitor, that you choose a service that can monitor them all.

Finally, when looking around for the right personal finance software that meets your needs, make sure that you’re comfortable with the program’s interface. It shouldn’t be expected that you recognize every single feature instantly, but if the features don’t seem readable and manageable to you, then you’re not as likely to use it and get the full benefits.

Final Thoughts

Personal finance software can go a long way in helping you to take control of your money and meeting your financial goals. It’s important to note, however, that some focus more on budgeting and expense tracking while others prioritize investing portfolios and income taxes. Explore several different programs and read reviews to find the one that’s right for you.

In this day and age, managing one’s personal finances in a secure manner that allows the user to have a real-time visual representation of their money is easier than ever before. With the numerous applications that are out there — both free and subscription-based — there’s no reason that every person can’t take control of their money and ensure they’re making smart money moves.

Featured photo credit: rawpixel via unsplash.com

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