This is the fourth article in Frugal Dad’s week-long series, The 7-Day Turnaround: One Week to Change Your Family’s Financial Destiny. Each day brings a new step to implement and help you get control of your finances.
At this step in your 7-Day Turnaround it is time to take a serious look at your [tag]expenses[/tag]. To make a dent in debts, or boost your savings, you have to free up some income by either earning more, spending less or some combination of the two. Begin this process with a review of your monthly, non-utility expenses.
Gym memberships are usually the first to go. At $40-$50 a month for the average membership you are giving $500-$600 away that could be spent building your Roth IRA balance, or paying down your credit card debts. Buy a good pair of tennis shoes and some used dumbbells to simulate your gym experience at home. Also, check amazon for coupon codes and various deals of home gym equipment.
Consider canceling the cable. The mere thought of living without television strikes fear into most people’s hearts. Fact is, television programming today is filled with mindless reality shows and silly sitcom scripts that are far from educational. Spend your time away from work participating in things that enrich your life, not wasting it. Read a [tag]personal finance book[/tag], or a book on [tag]personal development[/tag]. Grab those new running shoes and take your kids on a walk. Take up a new hobby. Volunteer your time for a cause you believe in. All of these things will enrich your life, both personally and professionally. Knowing the last five winners of American Idol, or who got voted off the island will do little to further your career or your important relationships.
Adjust your W-4. Stop giving Uncle Sam an interest-free loan every year with biweekly contributions from your paycheck. Visit the IRS website, or Paycheck City, and estimate this year’s tax liability. Adjust your withholdings accordingly. Many taxpayers use the payroll tax system as a forced savings account and rely on their tax returns to plan for major purchases. If you depend on the federal government to save for your annual vacations you have a much bigger problem than credit cards.
Brown bag it. There is never a shortage of broke people out on their lunch breaks waiting for a table at their favorite restaurant. The average lunch combo runs $7-$8 with drinks and a tip. That could push your “eating out” budget to $40 a week, or roughly $150 a month. A simple switch to bringing you lunch to work could save you enough to make an extra car payment, or start a 529 college savings plan for your child. Plan to take soups, sandwiches and dinner leftovers for one month and monitor your food budget. Chances are it will shrink significantly, and so will your waistline.