Eucalyptus Magazine / January 2010 / Financial Fitness

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Financial Fitness

Becoming More Fiscally Responsible

It is true that a penny saved is a penny earned, and pennies earning interest can quickly morph into dollars. Start your year off right by taking these small steps to tighten your financial belt, and plug up the leaks that are siphoning away your hard-earned green.

1. Come up with a budget. Take last month’s statements and add up how much you spent on certain line items—food, entertainment, rent/mortgage, transportation, etc. Now analyze where you could feasibly cut back on your expenses. The goal is to allocate more money to savings, which experts say should represent at least 10 percent of your net pay.

2. Adopt a “less is more” lifestyle. We live in a society where we are constantly bombarded by advertising. On television, on the radio, even on the Internet, someone is constantly telling us to “buy more.” Think about everything you buy and determine if it is a want or a need. Limit yourself to no more than one “want” purchase per week. This might mean brewing coffee at home, checking out movies at your local library instead of purchasing them, and mending clothes and fixing broken items in your home instead of buying new ones.

3. Reduce your food costs. Meal planning helps you stay on track when you are shopping and prevents unnecessary purchases. Also, try buying the majority of your vegetables and fruits from farmers’ markets, which often have lower prices and higher quality than grocery stores. Another way to significantly reduce food costs is to eat out no more than once a week.

4. Reduce your energy consumption. Have your power company perform a free energy audit of your home; it’s a great way to find problem areas that could be resulting in higher electricity usage. Other ways to reduce your energy bills are washing clothes in cold water, switching out your regular light bulbs for CFLs, using a clothesline to dry your clothes, utilizing a power strip for your electronics and turning it off when you leave for the day or go to bed at night, and lowering your thermostat by a few degrees.

5. Curtail the retail. For almost any purchase you can make in the store, you can probably find a better deal online, especially since many businesses offer online-only specials. Also, online browsing is a good way to find the best bargain without driving all over town and wasting gas.

6. Ditch the credit and dash for cash. Studies have shown that when we pay with cash, we tend to spend less. It’s nearly impossible to be in denial about our spending habits when we watch a wad of cash disappear from our wallets.