Saving in the New Year

The buzz in the news lately is about raising the minimum/living wage. While it might be nice to get a raise, I still think that the problem is more of a lack of control when it comes to spending and less of the need for more. We live in a society of “more.” More choices, bigger stores, nicer cars, more clothes, more toys, more STUFF. We can’t change what our society is about as a whole, but we can change what we are about. And I want to be about less. I want to simplify my expenses and remember my true needs vs. wants. The only thing I want more of this year is money in savings, and freedom from debt.

There is no better reminder of needing to live on less, than the nasty credit card bill with a side of heart attack that some of us may be receiving in the next few weeks. But it won’t be me. Here are some tips for avoiding the bills next year so there is more to save:

1. PUT GIFTS IN THE BUDGET. Christmas comes every year, and yet most of us don’t plan for it in advance. We do not use credit cards in our house (more on this in a minute). Instead we put gifts into our monthly budget. We write a list of birthdays, anniversaries, weddings, babies, holidays, and Christmas gifts with a name for each person we’ll buy for and a dollar amount. We also plan some wiggle room. Then, we add up the numbers and divide it by 12. It’s as simple as that. You’ve got a plan for gifts and credit card debt will sneak up on you no more – as long as you actually put that money aside of course. And if the amount is too high to afford each month, that is a really good indication that you are over-spending and some re-evaluation is needed.

2. NO CREDIT CARDS. If it is hard for you to imagine your life without a credit card, that might not be a good thing. Credit cards are not a need in my book, they are an excess. We have never had credit cards as a couple, and we do not ever plan to have one. Some people use them for their regular expenses and pay them off a month at a time. I would not support that either. It is proven that credit cards increase your impulse to spend more than you would with cash – read, The Truth About Credit Card Debt. If you have a good savings plan for gifts in place (or anything for that matter), then it just isn’t necessary. Why use a credit card when you could put the money away all year and EARN interest instead of paying it?!

3. STICK WITH YOUR BUDGET. When we set a budget, we try very hard to stick with it. We usually only carry cash and obviously don’t have credit cards, so this means we have no back-up if we find something on sale or want to make an impulse buy. This year we went over a little bit for our sons first Christmas (for jammies and a Christmas movie) – BUT, we’re also debt free and have a good amount of savings, so it was not hurting us financially to do so. If we had a large purchase we needed to make or bill to pay, it probably would not be wise to go over. Just use discretion!

4. NEEDS vs. WANTS. Our son is not even a year old and already has an impressive fleet of toys. We are becoming more aware of the limited space we have and the excess that is happening little by little. I read this AWESOME article by Ruth at Living Well, Spending Less, who packed up (or got rid of) all of her kids toys one day. It came from her desire that they become more appreciative of life, and content to be in the moment instead of fixating on having more things. She talked about seeing that happen naturally when they were not surrounded by the chaos of stuff all the time. It really made me think about the stuff we buy for no other purpose than because “it’s pretty.” Many times the needs we perceive as needs are not really needs at all. All we need is to be fed, clothed, and kept safe and warm.

I hope that these tips will help you to plan a better Christmas next year and maybe a better year too!

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