Many people set goals for themselves at the start of each New Year. Some of these resolutions deal with weight loss and fitness, but many of us also set goals to manage our personal finances better. In a sense, I go on an overspending diet at the start of each year. While I had a tight budget at Christmas this year, in the past I have been guilty of splurging during the holidays and going over my budget. During the holidays, it's hard to not get caught up in the excitement of the season and go overboard with spending, food and many other areas of our lives. I use the following tricks and tips to get back on track on those occasions when I have overspent and find myself with little funds, and in debt or with bills coming due for things such as increased heating expenses.
Waste Not Want Not
The first few months of the year are a great time to establish habits that will serve each of us well through the year. Since many are dieting anyway, a great way to stick to an overspending diet is by watching what is eaten - these months are a perfect time to spend less on the grocery bill. In the months of January and February, I will normally spend very little money at the grocery store and not eat out at all. Instead, I concentrate on fixing the foods that I already have on hand in my freezer, cabinets and pantry. For instance, at the start of the year, I spent $76 on some perishable items at my local grocery store to feed the four of us that are at home; but I have no plans to buy any additional food before the middle of next month. I use online searches for the ingredients that I already have on hand and plan menus and prepare recipes around this. My goal is to completely use up all of the canned or frozen food in my house. I try to do this every January and then once again in the late summer. I save money two ways by taking this approach. First, I save money by spending less money at the grocery store during this time, and I also save money by making certain that I am not wasting money by forgetting about foods in the back of my freezer or cabinet until they have expired and must be thrown away.
Those Who Fail to Plan, Plan to Fail
During this same time, I also go back over my finances of the past year, and try to figure out what I did right and wrong. Questions that I ask myself during this examination of my budget are what things worked and what things did not? What were my causes or triggers for overspending? Without close examination, and making a plan to avoid these budget pitfalls, I've found that I often repeat these same mistakes later. An example of this is one year, I reviewed my grocery and dining out expenses for the year and realized that at certain times of the year my daily schedule is more hectic, which makes me more likely to go overboard and eat out or fix prepackaged foods, which are more convenient but also more expensive. Knowing that these times seem to pop up with some regularity, year after year, I now make plans beforehand to make and freeze things ahead of time, such as a few casseroles, so that I am less tempted to go through a fast food drive thru. When I started doing this on a monthly basis, I was able to cut my eating out expense over 75%.
Normally I am able to take the money that I save by using these two strategies at the start of the year to pay off my heating bill and other expenses that are larger after the holidays. This year, I was frugal with my holiday spending because I had little choice, but I plan to continue these strategies next year to have more money at the start of the year to put towards other financial goals such as savings and retirement.