The first step we did was get off paperless statements for all of our credit cards and bank statements. We wanted to receive the monthly statements physically. Why? Because this is the easiest way to see how much we are spending and where.

While paperless statements have many benefits, including being more convenient and leading to less clutter, in my experience; they also made it easier for us to blow our budget for the month. We used to get in trouble with the smaller purchases, think about it. It is the $20 here and the $30 there that in a month add-up to $500 or more in impulse buys aka “wants” instead of “needs.” These impulse buys are the ones that get us all in trouble! An extra $500 per month in miscellaneous “wants” or “impulse buys,” is $6,000 per year in impulse buys!

With this first step, we became aware of just where our money was going. We found some things that we had subscribed to but forgotten about, but we were still paying! Are there any “subscriptions” that you are paying for but not using that you can cancel? The only way to do this is to sit down with your monthly statements and review them.

The first step in putting together a budget is knowing where you are spending your money. Do this for all of your bank & credit card statements, and you will finally begin to see just where your money is going.

I will admit that this is very convenient, but you lose track of exactly how much you have spent with this convenience. Don’t believe me? Then tell me how much you spent in the last two weeks (or how about just last week) using Apple Pay or Google Pay without checking? If you do not know, then you need to turn them off! If you have ever logged into your bank account and been surprised about how low the balance is, you need to get off Apple Pay and Google Pay right now! 

WE REMOVED Amazon, eBay, Groupon, and any other SHOPPING APPS FROM OUR PHONES! Any app that is your “go-to” shopping or browsing App when you are bored, you need to remove it from all of your devices. Our go-to app was Amazon. Until we realized that, on average, we were spending $600 per month! Please don’t ask us what we bought because we could not tell you! I can tell you that once we removed these apps from our phones, our average spend has dropped to just over $100 per month of stuff we need and use from these retailers.

In 2016, Ebates announced its results of a Spring Shopping Survey, which found that 96% of adults admitted to participating in retail therapy! Retail therapy is another name for bored shopping. No wonder most Americans do not have more than $1,000 in savings in the bank! They spent it on “stuff,” looking for the emotional high that comes from the “click” when they complete a purchase for something they do not need or want.

UNSUBSCRIBE FROM ALL STORE EMAIL LISTS and get rid of the temptation. When you are on a diet, you do not buy sweets, chocolates, and foods high in carbohydrates. When you want to save money, you have to get rid of the temptation to spend it! If you are worried about missing a sale, then do the following to prove why you can and should do this.

Sort your email list by sender 

Notice the frequency that you get “sale” emails

In our case, we found most retailers were sending out one “sale” email per day, and some were sending out two per day! Doing this will prove to yourself that there is no need to be registered for retailers’ emails to find out about sales. They are always going on! 

While you are at it, cancel all catalogs as they arrive. Please don’t throw them in a pile for later, do it now! Catalogs take a few months to cancel entirely because they are usually preprinted a few months in advance. Reward yourself every time you call to cancel a catalog. Go outdoors, enjoy spending time with your family doing something that does not involve shopping. Start working on the positive feedback your brain needs to look forward to doing these things and breaking this habit because that is all it is, a habit.

USE CASH FOR YOUR MIDDLE OF THE WEEK PURCHASES

We used to blow our budget because of the small $10, $20, and $30 purchases made during the week. When we add up these small purchases over a month, it was always several hundred dollars spent on miscellaneous “stuff.”  The individual purchases were not the problem. The problem was when you add them together.

We now use cash for all of these “middle of the week” small purchases. We begin our week by going to the ATM and taking out the money budgeted for that week for these smaller expenses. We use this money to buy coffee and pay for any lunches, snacks, or even happy hour drinks. Any expense that is not something you actually “need” and have budgeted for should be paid this way. The advantage of only using cash is that you can see exactly how much money you have left! Tip – When you go to get the money get the largest bill possible. It is harder psychologically to break a $50 or $100 than a $10 or $20 bill.

If you prefer not to use the cash, you can always open a separate account WITHOUT overdraft protection for these types of expenses. The idea is not to spend over what you have budgeted; this is why you should have NO OVERDRAFT PROTECTION on this account. Always use this debit card for the middle of the week miscellaneous expense. Any expense that is not something you actually “need” should be paid this way. The advantage of only using cash is that you can see exactly how much money you have left! 

Credit Card companies pitch Paperless Statements as a more secure way to keep your financial information protected from identity theft. For this to be true, you need to follow Guidelines for Proper Password Management and keep your computer and antivirus up to date. For a Password Management tool, I highly recommend LastPass. We have been using LastPass for years and love it. To boot, they even include free credit monitoring with their paid plans! I recommend you enable the “Two-step Authentication,” which makes it extremely difficult for people to get unauthorized access to your passwords.

Identity theft can happen in many ways, and one of the best ways to protect yourself and your loved ones, which also happens to be free, is to put a Credit Freeze on everyone’s credit files with all 3 Credit Bureaus. You can read more about Credit Freezes directly on the FTC website.

One additional item I would like to add is to get yourself a cross-cut paper shredder. We use the Amazon Basics 8-Page Cross-Cut Shredder. You want an inexpensive way to destroy your statements after you have reviewed them to avoid the possibility of identity theft.

Read our in-depth article that covers the steps to follow in order to Freeze your whole family’s credit reports.