Get ready to take control of your finances and live your best life! In this week’s episode, I had the pleasure of chatting with the incredible Andrea Woroch, a nationally recognized consumer finance and budgeting expert. We dove deep into the world of budgeting and how it can empower us to feel more financially secure.
This episode will help:
👉 Give you simple tips to help you feel more financially powerful
👉 Help you break out of the paycheck-to-paycheck cycle
👉 Make budgeting simple, fun, and way less stressful
In this episode:
03:21 The Reality of Living Paycheck to Paycheck
05:44The First Step: Budgeting
09:34 Where is Your Money Going
13:50 Impulse Spending and Emotional Triggers
18:45 Getting out of paycheck to paycheck
24:13 Creating an Emergency Fund
32:32 Money Management in Marriage
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Know Where Your Money is Going
The first step to budgeting is figuring out where the heck your money is going. Make a list of all your expenses and take a good look at them. You’ll be surprised at what you find, just like when you count calories on a diet – it’s an eye-opener!
If you have older kids, let them be part of the project. I have three kids so we recently printed out 3 months of statements. I game them each a set of highlighters and a simple budgeting sheet. What I really wanted them to notice was how much we spend on Amazon, eating out, and miscellaneous purchases. Then I let them make a plan for how we could save money. Now everyone’s on the same page.
If you have younger kids, we have a free simple downloadable game called Don’t bust your budget that can really help them begin to understand budgeting. We’ve used it with our kids and youth groups personally and have seen it used in classrooms as well!
Make Budgeting Fun
Budgeting doesn’t have to be a boring chore. Turn it into a fun activity! Grab your favorite drink or treat (for me that’s chocolate), or involve your partner and let it be an enjoyable experience.
Budgeting is really about keeping more of your money for the things you want. It’s not about restriction, it’s about allocating your income where YOU want it to go.
Visualize the alternative uses for the money you save – that Caribbean vacation or that brand-new gadget – and let the excitement motivate you to cut back on non-essential expenses.
Tackle Impulse Spending
Did you know that the average American spends over $300 a month on impulse purchases?
Or how about this… Spending just $27.40 a day on miscellaneous stuff (I’m looking at you, Amazon Prime) adds up to $10,000 a year!
Reflect on your impulse purchases and consider their impact on your finances and overall well-being. Create barriers to impulse spending, like removing payment and shipping information from online accounts or giving yourself a waiting period before making a purchase. You got this!
Escape the Paycheck to Paycheck Cycle
Living paycheck to paycheck is tough, but it’s not impossible to break free from, and the work to get there is worth any temporary sacrifice!
Start by setting a budget and identifying the expenses that are preventing you from saving. Shop around for better deals on services like car insurance, cell phone services, and ask yourself if you really need all those streaming subscription services – you’ll be amazed at how much you can save.
Treat savings as a priority and pay off debt before other bills. Shift your mindset from spending all the money to spending as little as possible – it’s a game-changer!
Build an Emergency Fund
I can’t stress the importance of this one enough! An emergency is the difference between peace of mind and being stressed out of your mind. An emergency fund is like a financial superhero cape. Aim to save 3 to 6 months’ worth of living expenses. If that seems overwhelming, start with just one month’s worth of expenses and work your way up.
Having that safety net will give you peace of mind and the confidence to handle any unexpected curveballs life throws your way.