Why You Should be Implementing these Money Saving Tips

So you’re a few days removed from Christmas Days and even further out from holiday shopping, and you have likely completed your holiday plans, travel, stuffed yourself with delicious food and opened up your fair share of presents, along with giving out all those gifts you worked so hard to gather, spending your hard-earned money to brighten someone’s day.

Now, the real fun begins.

Sure, sipping egg nog, filling your tummy full of sweets, cookies and cakes and enjoying the company of friends and family is what makes the holiday so special. Chances are, however, you may have spent a few dollars above your holiday budget, and thus are searching for money-saving answers as December ends and that new year is upon you.

A new year, mind you, that may include a resolution to do a better job of saving money, and that’s where these common money-saving mistakes come into play, the missteps you’re making not only as a result of overspending potentially over the holidays but daily or monthly financial wrong turns that exemplify anything from the amount of debt you carry to how little cash you have on hand at a moment’s notice.

Consider the holidays, the ones that just happened as a microcosm of how you spend the rest of the year.

For instance, the pressure to overspend on the holidays may coincide with, generally speaking, how you feel about spending. Perhaps you feel as though you overspend to compensate for happiness or the want to have the latest and greatest, a fatal financial flaw in the masses.

The holiday spending is roughly 2 out of every 5 shopper feeling as though they have to spend more to make the holidays worthwhile; Roughly 45 percent of shoppers feel that pressure drives their buying decisions.^[1]

Spending in totality is driven by emotion, acceptance, oft-putting rationalization and a general money unconsciousness that allows you to justify how and where your money goes.

About half of the American population say they spend with emotion as the main driver, while 86 percent in that same study say it’s acceptable to go into credit card debt for certain reasons, but 87 percent are ashamed of any debt they carry.^[2]

Let’s not forget another reason, aside from the holiday chatter, why individuals overspend: to keep up with what everyone else is doing, and that couldn’t be more true than with millennials.

About 40 percent of the millennials population spend in order to have the same things their friends have or as a general point of acceptance; if they don’t have something, then perceptually they’ll be exiled from their group of friends.^[3]

Even more alarming about the millennials statistic from that same report is that this segment or demographic is all about keeping it a secret, with 73 percent making sure their debt stays on the down low, with 36 percent doubting that they could keep up the lifestyle they want (or need) and long for, without some sort of debt.

Acquiring debt is more than just holiday fanfare, too. Lots of shoppers in and around the holidays are fine with adding debt, in the form of credit cards, as a means to get through this time of year to ensure they have enough gifts to go around, but mortgage their future financially to do so.

The same could be said for the year-round propensity to do the same.

Americans tend to spend emotionally, and that is chronicled above, but let’s remember that overspending in general is compensatory way of ridding yourself of money to gather more things, with 64 percent saying they have credit card debt, and six of 10, per this study, saying that spending is more about “unnecessary things,” suggesting that buying is more about that instantaneous feeling of greatness and happiness in the form of a product.^[4]

And this isn’t so much about picking on the holidays as a catalyst for bad spending behavior. The porous route of spending is a year-round dilemma consumed by the masses faster than that fruit cake and homemade ham you had a few days ago.

At the root of these are money mistakes you’re making with your budget, your spending habits and how you feel (or don’t feel, honestly) about saving money.

If you can get these few money mistakes out of your life completely, the holiday spending or burden of buying in general, won’t be much on an issue moving forward, and the good news for most people is these changes are full-scale, stare down the barrel of difficulty but instead are more about adopting a mentality and mindset that puts money saving first.

Here’s how:

Don’t ever stop budgeting or adjusting your budget consistently

The funny thing about budgeting is that most people assume they do it, and do it well.

The facts are much different than opinions or beliefs those same people carry, as only about 1 in every 3 households or people actually budget from one month to the next.

What’s the biggest reason for that?

Americans who are over the age of 30, less than half, don’t even know what a 401K is, and 55 percent really have no idea what would constitute a long-term plan.^[5]

That same study showed that 30 percent feel what they make and how they budget can help devise a proper plan, financially and only 13 percent have an actual five-year financial roadmap laid out, with most assuming that debt is acceptable and common.

So the reason budgeting isn’t being done, nor is a budget being reviewed and audited is simply because most people really don’t know what a “good” budget looks like, what a “good” financial plan entails or generally lack the wherewithal or knowledge to actively grow their financial standing.

Ignorance, really, is how this is defined.

That’s when a financial planner might be in order, or simply write down your expenses, match them up with your income and devise a very raw but effective (better than nothing) budget that shows you in black and white if you’re on the plus or minus side of your money.

The only way you’ll get a savings account is by, well, saving

If you’re not doing a great job saving or that emergency fund is non existent, that really means you’re not making it a point to save money.

If you’re someone who gets both of these, you’re almost assuredly in a better place right away as far as holiday debt and money you’ve spent during the gift giving period.

What about that year-end bonus or holiday pay surplus you received? Where is that going, may we ask?

Often times year-end bonuses are paid out in January or February of the following month when the year comes to a close, so that’s a perfect example to take that money (not on a cruise or vacation) but instead reinvest it in paying down holiday debt or debt in general, throw a few dollars toward that credit card debt.

Think of it this way: the average U.S. household has about $16,000 worth of credit card debt.{http://time.com/money/4607838/household-credit-card-debt/">[6]

So, if you’re already managing debt and only added to it for the holidays and depleted what money you had saved, the bonus being distributed to your savings account is hard to argue.

Sure, you might not be addressing debt right away but you also have that security blanket of dollars tucked away for that “rainy day” when you need to make home repairs or fix your vehicle. If that money went to toys, video games, and Black Friday or Cyber Monday spending, like your mom or dad would say, put it back where you found it: in this case, it’s money in your savings account.

Financial experts say a bonus is best used at a 90-10 ratio, meaning that you should use about 90 percent of it for the aforementioned, get back on track holiday savings plan and the rest on having “fun” with it.^[7]

You should simplify budgeting to the point that there are no shades of gray as far as what you can spend on yourself versus necessities and credit card debt (undoubtedly added during the holidays), you might want to use the 50-30-20 rule of budgeting, an effective, rudimentary way to look at budgeting and saving with a broad brush.

Simply put, the 50-30-20 rule allows 50 percent off your after tax spending to necessities, leaving 30 percent for “wants” and the final 20 percent for savings and debt.^[8]

When you’re talking about the saving money, the conversation typically is either one extreme to another side argued.

You either want to save money or you really aren’t interested in the idea of it, mostly due to convincing yourself it isn’t possible.

A staggeringly scary and sad statistic should leave you subdued completely when you consider that only 39 percent of the entire American population say they’d be able to cover a financial emergency, should one arise, that would total a mere $1,000.^[9]

Other reports show that as little as $400 is all the cash anyone has on hand from one day to the next, hardly enough to cover a would-be emergency. That $400 has some merit, as a recent study showed that 40 percent of adults don’t have $400 in cash available should something of that amount arise, with 25 percent having zero dollars saved for retirement, too.^[10]

This isn’t about upsetting the masses or a scare tactic to ensure that you’ll leave any financial conversation devastated that you’re so far behind in the money marketplace that you’re doomed no matter how hard you try.

What this should leave you with is a call to action that change should be imminent, and that not properly managing your money isn’t an opinion or negotiable.

Saving and budget need to be the foundation of how you view and grow your almighty dollar, and if unwise decisions and money ignorance are getting in the way, you’ll have to wipe away those bad habits and replace them with incentive to adjust and flourish from a money perspective, no matter if the holidays have come and gone or if it’s a random day that a financial decision needs to be made with your best outcome in mind.