Financial advisers say there’s no better time to get a grip on your spending than the new year.
Advisers say in the past, when you paid for things with cash, the tactile experience of money passing through your hand made you aware of what you were spending. Now with a swipe of plastic, we buy anything, but the awareness factor is not there.
They said the little things like overdraft charges and debit card fees sneak up on people.
“I’ve seen anywhere from $20 to $100 a month extra that people don’t realize is being drained out of their checking and savings accounts,” said Joy Reese, counselor with Change Inc.
In our busy lives, another thing that can drain your account is eating on the go. “I’ve seen people spend $300, $400, $500, even $600 a month on convenience foods,” Reese noted. “And they have no idea. They think they may have spent $60 at drive-throughs, but it’s much more.”
Reese says each age group spends differently. Millennials may be cautious in some areas of their spending. “They may not go out to eat,” Reese noted. “They may be green conscious. They may be very frugal, except when it comes to technology. It seems they always have the latest and greatest item.”
At The Monteverdi Group, a financial planning in Wheeling, they urge people to know their numbers — both their income and their spending. And that’s a challenge for most people.
“They may know what they spend on electric, gas and cable,” said Jason Haswell, managing director of The Monteverdi Group. “But if you look at groceries, gas, going out to eat, little things, most people have no clue.”
Haswell urges people to take advantage of painless ways of saving, like participation in a 401k account at work. “You begin to not even miss that money coming out of your paycheck,” he explained. “And as time goes on, the longer you go, that can amount to a nice little chunk of change.”
Joy Reese urges people to download a personal finance app. She recommends Mint.com. “And it’s free!” she emphasizes. “Always look for free.”
She also advises writing down your financial goals on a Post-It note and put it in your wallet. It might be “Buy A House” or “Send John To College.” Then, seeing it every time you start to buy something will prompt you to focus on what’s important.