Tips to Prevent Overspending & Manage Your Personal Finances | Mint Personal Finance Tips Video

Transcript

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Now I would love to ask everybody, now that we’ve talked about ways consumers overspend
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I’d love to talk about your favorite ways that we can save money. Easy, simple tips for the average consumer
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to save big this year. So can we start with Melissa again?
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Sure. I think the number one way to start being mindful of your money is to track your spending.
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It’s the same as calories. Cash and calories. It’s so easy to overspend, to overindulge, and
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so we need to know where our money is going so we know how much discretionary income that we have to spend as we please, and if
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you can kind of get into that mindset that it isn’t about doing without, it’s about knowing what I have to spend freely
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then things kind of change, and whether you’re using a product like Quicken or however you’re doing it,
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doing it on a daily basis is going to make it very simple to do, very easy. It’ll take you just a couple of minutes a day.
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Don’t worry about going back and adding all your spending for the last, even for just the last eighteen days of the year.
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Just start now. Start today. My second tip really quick. Going back to the food example
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is to create a non-negotiable day to get to the grocery store, and that is just that you make an appointment with yourself.
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This is important food. You have to eat, (laughs) and so having food in your home is key.
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So creating that non-negotiable day, and going with a list of ingredients for meals rather than a list of groceries that you need.
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Groceries are what you bring home. You spend two hundred dollars on, you bring them home, and then you have nothing to eat in the house. (laughs)
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Ingredients for meals are things that you’re going to end up cooking. And then finally, my last bit of advice would be
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to create a spending book, and it would be something like this. Just a little blank notebook that you
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can use to track things that you want to spend your money on and it’s almost giving you permission
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as long as you have the money available to you. It would be the clothes that you need to add to your wardrobe,
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It would be the movies that you want to go out to see because your time is just as important as your money
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so you want to make sure if you’re going to go to the movies you’re going to remember that movie that you really wanted to see
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or remember that book you really want to buy, and so I’m a big, big fan of a spending book because it helps us
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create a very purposeful life. Saving you time and saving you money, two of my my favorite things.
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I love that idea. I might have to adopt that aft this. (laughs) Okay so Brittany, what are your favorite ways to save money?
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Well I agree with Melissa, of course, and definitely I think automation is huge. I mean, just coming from a more
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financial planning tactical side, the more you can automate your financial life, the easier it will become for you to save
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money and spend less money. So what I mean by that is you should have all your committed bills be automated.
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Direct bill pay-those should come out first. You definitely want to make sure those are averaging about fifty percent
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of your net income every month. That would be like rent, utilities, insurance premiums, basic, you know, things you need to survive.
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Then you want to try to automate your savings, which should be about ten to fifteen percent of your net income.
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So if you can set that up so you have a savings plan going to maybe building your emergency fund, maybe extra debt payments,
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retirements. Automate that just like a bill. And then finally, you can spend the rest of the money every month, and you can
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do some guilt free spending. And that leads me into my second tip which is all about mindful spending.
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Just like Melissa said, you need to be aware of your spending habits daily, weekly, and stay in the awareness of
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am I spending in alignment with my core values in life? You know, does this purchase bring me more happiness or is it just
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something I’m doing to keep up with the Joneses? So practicing mindful spending is huge, and then the third thing
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would be the tracking. So tracking your spending habits you can, you know, I just have clients keep a notebook and a pen
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for thirty days. It sounds so cheesy and old school, but it works because the thing is you need to train your mind
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to be spending in alignment with this allocation that you’ve said you have every month, and by actually putting pen to paper
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you’re like training your mind to stay within those healthy boundaries. But what you have to do is not only
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track your expenses but then go back and review it. So you know, then you could double check and say, “Okay,
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look at all of these purchases. Some of them were actually in alignment with my values in life, and some of them were just
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you know, random purchases. I could definitely eliminate that.” You want to cut back on all of those mindless
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purchases or spending and get more in the mindful spending.
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Okay, great tips! How about you, Donna. You’re next.
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Well along the line of tracking your spending, I want to say create a budget, and budget is one of those words
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like diet or colonoscopy words (all laugh) nobody really wants to think about because they sort of connote deprivation,
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not deprivation. They connote kind of fear and pain and maybe discomfort, but I disagree. A budget is very freeing
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because, as someone else has already pointed out, you know what you have coming in, you know where it’s going,
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and then what’s left is yours to spend or save. So definitely create a budget. Yesterday I got my hair cut and
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the stylist said, “I know I need to save more money. I just can’t. I just don’t know where it goes,” and I said, “Write
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this down: M-I-N-T dot C-O-M. You really need to put their money into this software that is going to tell you where your money goes
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Then you get to determine where you want it to go,” and sure enough as I was paying she said, “What was that website address again?”
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and she wrote it on a sticky, and I hope to God she uses it because she has three children. You know they need to learn money habits from their
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mom. Not just that she, you know, stops at McDonald’s because she’s too tired to cook or that she just buys them
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whatever they want. Another way of saving money, again, pack your lunch and learn to cook.
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I understand that for this generation eating out is more of a necessity in their minds, and I also know that eating lunch out can
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be a networking or team building or whatever you want to call it. So start small. Take your lunch twice a week, and
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cook three nights a week. In fact, if you cook enough you won’t only have to cook three times a week, and you’ll have
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leftovers or repurposed leftovers later. I would also suggest an app called ImpulseSave. When you’re out shopping
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and you say, “no” to that latte or you say, “Oh no, I’m not going to buy those earrings. I don’t need more earrings,”
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you type the amount you would have spent into ImpulseSave. It’s an app, but it’s also online, and that money immediately gets taken
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out of your checking account and sent to an online savings account. So instead of impulse spending you’re impulse saving.
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And I’m not getting any money for recommending this app. I just think it’s a great idea. So that’s a good one, I believe.
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Was that two or three? (laughs)
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I think that was three. (laughs)
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Okay. I’ll be quiet now.
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How about you, Margaret? You’re next.
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Alright. Well my number one on my list was to be intentional. Be intentional with your spending. I think if you
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you know, if you have a general idea of what, you know, a new hobby you’re going to adopt or this is going to be the year of
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Margaret skiing, right? So then I’m going to be really intentional about the purchases that I make,
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so that I can make that a reality so that at the end of the season I’m not just saying, wait a second, how did I only get in two trips to the
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mountain and what happened to the rest of my money? So being intentional with what you’re actually, with what you’re doing with that money.
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Which kind of is just part of planning. You know, planning and thinking ahead about what are the big, what are the ways that you really want to
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treat yourself this year rather than treating yourself on a small, daily basis. I think also being creative. Being creative
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about, so vacations, the example I used earlier. Travel. Rather than taking that flight with the whole family and staying in hotels
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maybe consider camping. You know, maybe do something different. Do something that you haven’t done before.
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where you’re investing perhaps in some camping gear that you can use again and again whereas that flight, you can’t. It’s gone.
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And then also, you know on that same note, just experiment. Experiment with new ways to save money. I think we’ve all been kind of talking about
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new things to try and ways to adjust your, adjust the way you spend money even with you know, what Donna was just saying
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about you know, two days a week bringing your lunch to work, making small changes. But try something like
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you know, a buyer driven site like BuyStand. I mean it’s just it’s a way that you can potentially save some money and
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why not give it a try?
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Okay, and Justin.
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So I’m going to remain in the realm of tips for homeowners and go back to what I was saying earlier about energy
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being such an amazing spending suck. Drafts, like I mentioned before, big thing. We tend to focus on keeping
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or providing really really simple, easy, low-cost solutions to help people save money. That tube of caulk I mentioned
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Five dollars a caulk may not save a life, but it can save you up to thirty percent on your energy bills thought the year.
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Another little thing is dropping your temperature one degree. For every degree you drop it down, you can save up to three percent
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of energy on your monthly bills. Going back to what I was saying before about that, you know, those avoidable
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repair and replacement costs of systems, my partner has this word that he invented that he reminds me of every day called proactivity
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and it’s basically just taking a little time to do preventative maintenance or to do little simple steps
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that’ll keep those appliances and systems lasting a lot longer. A good example of this is simply replacing your furnace filter.
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It takes five minutes. It’s between five and you know, twelve dollars let’s say depending on your air filter, and it’s going to have you breathing cleaner air,
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lowering your energy bills, and it’s going to make that particular appliance last a lot longer.
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I think the last one is relating to the unnecessary contractor and service fees. Plumbers tend to be pretty expensive.
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You know most average plumbing calls are around the two-hundred and fifty dollar mark, and we really like to focus on
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things around the house, common household items, that you can use. We maybe overuse vodka because we’re pretty big fans of that, but
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there’s a number of household items that you could use to do some of these preventative maintenance steps that will help prevent those guys
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from having to come out to your house and save you a lot of money throughout the course of the year. So we try to chop things up into bite-size, simple
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pieces that everyone can do, and I think figuring out ways to do it yourself sometimes really goes a long way in helping you save money.
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Very true. Alright, I’ll finish up with my three easy ways to save. First, and these I use in my personal life,
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I’m a huge fan of shopping used, secondhand or used so thrift stores, Craigslist. You can use your social networks to find
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used items. One of the biggest suggestions I have is it’s one thing to buy used and you get a deal, but what we recommend is
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figuring the difference between what you would have paid new, what you paid used, and then actually physically saving
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that money. So there are lots of easy, small ways to save, but you actually need to do something with the money that you’re saving.
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And then I know that Brittany mentioned this before, but automate your savings. So you know, out of sight, out of mind.
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Pay yourself first. We always recommend scheduling regular transfers into savings account, but you want to make sure that
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you’re not using the savings account as overdraft protection. Don’t make it easily accessible. We love online bank accounts
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for emergency funds because it takes about two days to transfer the money into your regular checking account, and so if it’s truly an emergency
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you’re not making an impulsive move by having that money easily accessible. You can take a couple days to think about it before
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it gets there. And then finally, and I know this has been mentioned before also, is don’t shop when you are hungry or sad
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and wait thirty days before making a major purchase. It’s easy to overspend when your judgement is clouded.
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You can go for a walk, call a friend, even veg out in front of the T.V. to distract yourself from that feeling of wanting to spend money.