Spending money was fun well before Tom Haverford proclaimed “treat yo self!” on Parks and Recreation. There’s no denying splurging on a new ride, fancy feast or a relaxing vacation feels good, but facing your plummeting finances prior can put a damper on the experience. President and CEO of Black Star Wealth Partners, Wendy Brookhouse, and financial advisor Keith Barr show us how to get our just desserts without breaking the bank.
Use SMART principles
“It’s very realistic that you will have some debt in your life—student loans, mortgages and car loans are in most people’s today and tomorrow,” says Brookhouse. “The question is how can you have a solid plan to have that retired before you are, and this can be done by making sure your spending is in alignment with your goals.” She suggests sticking to SMART—Specific, Measurable, Achievable, Realistic and Time-Oriented. “A good plan will show you how to pay your debt down in a way that motivates you to continue and to save for that tomorrow.”
Yeah treat yourself, but within reason
“We view spending as part of your daily living and it’s unrealistic to tell someone to stop enjoying themselves,” says Barr. But there’s a fine line between living for today and surviving until tomorrow. He suggests kicking your emotional spending to the curb. How? “Less frequent stops to places results in less consumption spending.”
Avoid credit debt—now
Carefully monitor your credit card spending, this is the kind of debt to avoid and pay down as quickly as possible. Try to pay more than the monthly minimum of credit cards and ones with the highest interest rate, as they eat up more of your income.
Whip out dollar bills
“Once a week, withdraw a cash amount to get you through the following week and this will deter you from pulling out your credit card,” says Brookhouse. Both she and Barr suggest spending with cash more often.
Keep it simple
Minimize stress and go easy on yourself. Brookhouse recommends automating to help simplify the process of paying your fixed bill payments. “You never worry about whether this bill is being paid or not. Less worry means less stress.” In any financial case, she says it’s always important to have a team that’s solidly on your side. Never hesitate to seek assistance.