Swimsuit Season for Your Wallet

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Getting in shape for summer is a popular springtime topic. But have you thought about giving your wallet a swimsuit workout as well? After all, your financial health is just as important.

 

Consider a series of "exercises" that will help you understand your financial situation, cut back on expenses, kick unhealthy financial habits, and build your financial fitness.

 

Exercise 1: The weigh-in

Similar to how a personal trainer would want to evaluate your health status before you begin a new workout program, the same can be said for your finances. You first need to know where your weaknesses and strengths lie, so you'll know which areas to tackle first.

 

Take a look at your finances from last year and categorize your spending month-by-month to see how your expenses compare to what you're bringing in. This is the time to evaluate where your money shortfalls may be. Maybe you're spending more than you're making or spending too much in one category and running out of money for another. Or maybe you don't seem to have enough income after your expenses to put something away in savings. There are many available digital personal finance tools out there. Be sure to understand the terms of use and what the information you are supplying is used for.

 

Exercise 2: Getting trim

Now that you've organized and evaluated your finances, the Federal Trade Commission has a budget worksheet, flex (or create) your budget with this tool. Consider making a few trims. As The Budget Diet blog points out, trimming $13 a day adds up to $400 a month. Here are some "extras" to consider cutting back on or eliminating in your budget:

 

  • Cable/satellite TV: Evaluate how important this section is. If you can't live without it maybe consider switching to Netflix or Hulu as a way of cutting costs while not removing this category completely.
  • Review your cell phone plan. Some national carriers now offer better deals for big families, where you may end up with a smaller bill.
  • Dining out: lf you typically eat out three days a week, try limiting meals out to just one, and put the money you would have spent dining out into your savings. Don't be fooled, takeout and delivery also counts as "dining out" since you did not actually prepare your meal at home.
  • Entertainment: Going to the movies isn't as cheap as it used to be according to movietheaterprices.com. Are you spending $12 a ticket (or even more for a 3-D or IMAX show)? Toss in a couple sodas and a tub of popcorn, and that's not a cheap night out. No worries if you really want to see that flick, but if you're just killing time, rental services such as Redbox, Amazon Prime, or your cable provider's on-demand service, where you can rent movies for $2.99+. Invite a few friends and share the popcorn and soda cost.
  • Driving: While you may not be able to eliminate this expense completely, you can reduce it. It's not just about gas and maintenance. If you live in a big city, parking even for an hour can add up according to bestparking.com. Walk, bike, take public transit, and keep that parking money in your efforts to add years to your life with a light cardio workout.

 

Exercise 3: Habit hacking

  • Coffee: If you pay about $4 Monday through Friday for that morning latte, that's more than $900 a year. Invest in an espresso machine if you don't like drip coffee, prices start at less than $50. You could buy a bag of beans and brew your own (and you can still write your name on a paper cup, maybe even spell it correctly).
  • Failure to plan: Paying fees for failing to plan is throwing money away. Budgeting and planning ahead helps you avoid bouncing a check (national average penalty is $33, according to bankrate.com). Using an ATM that's not owned by your bank hits you for another almost $3, each time. In 2016, according to the Wall Street Journal, America's 10 biggest banks made $7.5 billion in overdraft and non-sufficient funds fees. CNN reports the three biggest banks alone made $1.1 billion in ATM fees in 2016.
  • Smoking: You knew this was coming. If you still smoke, there's a financial reason to quit. According to a study by WalletHub, the estimated lifetime financial cost of smoking is just above $1.5 million per smoker. Ouch. Think about potentially lower life insurance rates and saving paid time off for a vacation day, instead of another chest cold. You can do this, and there's help out there (free, of course).

 

Exercise 4: Biggest gainer

The key to making any resolution last is to check your progress. Look at your budget and spending on a monthly basis to make sure you're staying on course. Check for other ways to cut costs along the way. You may start to like what you see. You can shop around for a better deal on car insurance and use some of your new monthly savings to pay off high-interest credit card debt. You may want to build an emergency fund so you won't have to borrow when the unexpected hits.

 

How do you get your finances in shape? Share your success stories and best tips with others by joining our Savings board

 

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Neither Transamerica nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

2 Comments
#cmgr

Exercise 3: Habit hacking

  • Coffee: If you pay about $4 Monday through Friday for that morning latte, that’s more than $900a year. 

Eeeek! This figure is HUGE. I don't buy coffee from a shop very often but this is still a GREAT way to immediately start putting money back in your pocket! I received a Nespresso machine for Christmas last year and the sleeves of 10 work out to $.70 for each capsule. I am a minimal coffee drinker though just one cup in the morning so this works out to be fairly cost efficient for me. 

Thanks for the suggestions! 

Jotun

I don't drink coffee but I would say that the costs of my caffeinated beverages probably add up to that yearly figure, if not more. Hmmm, maybe time to cut back on the caffeine.

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