The beginning of February can be a time that New Year resolutions begin to fade. Instead, let’s make February a check point to evaluate the progress made. How many of us made resolutions to save money during 2017? (Me too.) Even if you didn’t, it’s never too late, or too early, to brush up on how to save some extra cash. MoneyUnder30.com has a different approach on how you can keep extra cash in the bank.
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Essentially, the MoneyUnder30.com wants you to ditch the traditional “budget” mindset. Instead, the site suggests reevaluating your monthly expenses by setting a spending allowance. This approach should cut back on the stress and time you may devote to a weekly or monthly budget. (MoneyUnder30.com)
The first step, according to MoneyUnder30.com is to track spending automatically. Nowadays, the Internet makes this an easy task. Sites like Mint.com can track spending from multiple cards. An alternative to using Mint.com to track expenses would be to use a single card for all purchases, or as many purchases as possible. The provider of the card will then be able to provide a spending analysis. An added bonus of using only a card is that the risk of cash getting lost or stolen is eliminated. (MoneyUnder30.com)
If you struggle debating whether to use a debit or credit card, MoneyUnder30.com points out the primary difference. “If you have a tendency to buy things first and figure out how you can pay for them later, stick to a debit card,” the site stated. “But if you’re comfortable with a credit line and only charging what you can pay back in full each month, credit cards are more useful than most debit cards.”
Next, the site suggests finding your nut. The nut essentially subtracts your fixed monthly expenses from your take home pay. Here is a graph MoneyUnder30.com suggests to use when calculating the nut:
The spending allowance, as MoneyUnder30.com calls it, is left to be spent without worry. The allowance should worry-free because the necessity of monthly expenses and savings have already been accounted for. MoneyUnder30.com’s different approach to “budgeting” takes a lot of unneeded stress and time out of the equation. (MoneyUnder30.com) Instead, use the extra time to devote to other New Year goals!