Surviving tax season is like getting through the holidays. There’s a kind of giddy exhaustion when the paperwork is filed and life gets back to “normal.” We’ll tighten our belts and get organized next week, so next year will be better. Suddenly, it’s summer, with lots more fun things to do than planning a budget. Back to school, the holidays (again), and – oh no! – it’s time to do the 2012 taxes.
Our New Year’s resolutions may be a distant memory, but it’s still possible to get a fresh start financially. We’re feeling motivated to make a few simple changes to our everyday spending habits now for some short- and long-term rewards. For instance:
Q. Organic or non-organic?
A. The sticker shock of organic produce is, well, shocking. Still, some non-organic produce can test positive for up to 15 pesticides, so what’s a smart shopper to do?
We like co-ops, farmers’ markets, fruit stands, anywhere there’s more affordable, fresh local produce. Here are a few organic items worth splurging on to avoid high pesticide residue:
Q. Debit or credit?
A. The golden rule of credit cards: Pay off the balance every month to avoid finance charges and credit problems.
Use your bank debit card to pay bills and day-to-day expenses, like filling the gas tank, to avoid overspending. The monthly statement is a snapshot of your expenses. Keep an eye on your balance to avoid overdraft charges.
Responsibly use a card with a benefits or rewards program to offset an annual fee for purchases like furniture, travel expenses, and dining out. Paying the balance every month builds your credit rating and federal law protects your liability if the card is lost or stolen.
If you must carry a balance, get a card with a low interest rate and no annual fee. The interest you pay on a carry-over balance will offset the perks you might get with a rewards card. Make timely payments and pay the balance off as quickly as possible.
Q. Is there a really easy way to budget so I’ll stick with it?
A. Try this: Take a set amount of cash out of your bank account each week. Use the cash for ALL your out-of-pocket expenses for the next seven days: gas in the car, groceries, going out to eat, etc. (Keep debit /credit cards in your wallet.)
Whether you are single, a couple, or a family, the challenge is the same: Use cash so you know what and where you are spending. (Keep the week’s receipts in an envelope for a paper trail.) When the money is gone, do not get more; stop spending until next week’s withdrawal.
It’s a jolt to see where your money is actually going. Sticking with a plan is easier after you get over the initial pain of delayed gratification, especially when you start to feel less stress from overspending.
You know the drill: Live within your means. Good luck with your fresh start. Let us know if you have a tip to share.
[Please note, dear reader, that this is strictly a friendly discussion and we are not giving financial advice. If you would like more good ideas for managing your financial decision making, check out Worth It…Not Worth It, by Jack Otter, the book that inspired this article.]