What to do with Your Old 401(k) When Changing Jobs

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When you are looking forward to a new job, your retirement savings plan is typically not the first thing on your mind. However, for many of us, an employer-sponsored 401(k) is one the biggest and most financially beneficial perks of a job. Your 401(k) is your future. It is a huge factor in your ability to retire when you are ready and live comfortably in your golden years. That being said, what happens to your old 401(k) when you leave your current job? The best decision will often depend on your specific financial circumstances. Here, we look at the four options you have for your 401(k) when you are starting a new job.

1. Leave it

Of all the options available to you, leaving your 401(k) where it is with your previous employer is the easiest option. The money in your account will continue to grow tax-deferred and be available to you upon retirement. If the plan comes with low fees and good investment options, you may want to stick with it. There are some cons to keeping your 401(k) with your previous employer. Depending on the employer, you may not be able to make additional contributions, take a plan loan, or make a partial withdrawal once you leave. Some employers will charge higher fees if you aren’t an active employee. There is also the risk that you could miss important updates about your plan, or forget about the account entirely. This option will highly depend on your individual circumstances and the details of your former employer’s plan.

2. Roll it into your new plan

While this may not be an option with all plans and every place of employment, this option will allow your retirement savings to continue growing, tax-deferred. You will be allowed to make contributions to the account, typically after a mandatory probation period ends. If your new employer has a better plan (lower fees, better investment options, etc.), it might be worthwhile to take your money with you. There are two ways you can roll your old 401(k) into your new one:

  • Direct rollover: The administrator of your old plan transfers the money directly into your new 401(k) account.
  • Indirect rollover: The administrator of your old plan transfers the money directly to you. Then you must manually apply the money to your new account. This option is typically for people who are in need of a short-term loan. Your employer will withhold 20% for taxes in case you decide to keep the money outright. If you add the money to your account in full within 60 days, the 20% will be returned to you when you file your tax returns.

3. Roll it into an IRA

Instead of rolling over your savings into another 401(k), you could put those funds into an individual retirement account (IRA). Because this account does not have to be connected to an employer, it is a great option for those leaving their job to go back to school, become stay-at-home parents, start their own business, or for those who do not have access to another 401(k). The money can be sent directly or indirectly, only this time you will not have to pay taxes like you would with a 401(k) or a Roth IRA. With an IRA, your money will be able to grow tax-deferred and you will have access to a wider variety of investment options than with a 401(k). An IRA also does not require you to pay fees if you withdraw your money for college, to buy your first home, or to pay off medical debt.

4. Cash Out Your 401(k)

When it comes to deciding whether or not to cash out your 401(k), it really depends on you and your specific circumstances. Most financial planners and asset protection attorneys will advise against it; taxes and penalties will cause you to lose a big chunk of the money you and your employer have invested. However, you know your financial situation best. You may need a big lump of cash to go back to school, as an emergency fund when one parent decides to stay home with the kids, or to start your own business. If you are considering cashing out your 401(k), you MUST make sure you understand what it will cost you.

When you cash out your 401(k), your employer will typically withhold 20% of your balance to pay off the IRS. You will also have to pay state taxes and, if you are under 59 ½, a 10% early withdrawal fee. It is also important to understand that by cashing out this money early, you will be missing out on the money your account could be making in the years between now and retirement. A 401(k) with $50,000.00 when you are 35 will turn into $216,000 by the time you retire at 65. If you were to cash out this 401(k) now, after taxes, fees, and penalties, you would receive approximately $35,000.

Veitengruber Law has experience providing long-term planning guidance at any stage in your career. Protecting your assets and preparing for retirement will look different for every client. We offer personalized strategies to help you make informed decisions about your retirement goals.

How to Save Money This Summer and Still Have Fun

With longer days, warmer weather, and the kids out of school, summer is a time for exciting activities, long-awaited trips, and idle indulgences. It can also be very expensive. Paying for extra summer activities, vacations, a climbing electric bill, and even more daycare can cause a strain on your finances. This doesn’t have to be the case. There are plenty of ways to stay frugal while indulging in the joys of summer. Here are a few ways to enjoy the summer without letting your spending run wild.

1. Skip the Gym

During the summer, the weather is nice and you find yourself spending more and more time in the great outdoors. Summer might be a great time to consider canceling your gym membership so you can take advantage of the great weather. Walking, running, biking, hiking, swimming, and outdoor sports are all great ways to stay in shape that allow you to enjoy being outside. While some people might need the gym for specific workouts, the majority of those with a gym membership could get the same workout at home without spending the extra cash. If you want to keep your gym membership for the winter, see if your gym will pause your membership plan through the summer months.

2. Find Free Fun

Summer is the ideal time for festivals, concerts, fairs, carnivals, and other free activities. Check out your town’s calendar or website to see what events are upcoming. Free events can be a great way to get the whole family out of the house and doing something together, or it can be a great excuse for an inexpensive adult escape. Take advantage of local parks. If you live near a national park, scope out the free entry days and plan a day trip. If you are looking to relax, check out a good beach read from your local public library. You don’t have to drop a ton of money to enjoy summer!

3. Travel on a Budget

Most people tend to do the most traveling in the summer months. Kids are out of school and the sunny weather energizes the explorer in all of us. The good news is you don’t have to ruin your budget to travel this summer. If you are up for an outdoors adventure, camping is a fantastic family activity that can be very inexpensive without sacrificing any of the fun. Many regions known for camping will have free campsites, allowing you to spend more money on seeing the sights and doing fun outdoors activities.

If camping just isn’t your style, you can still save money without having to rough it. Airbnb homeowners offer great options for budget travelers all over the world, from quaint cabins to glamorous apartments in big cities. Opting for a vacation rental with a kitchen can also save you money in food expenses, allowing you to stay in and cook instead of going out for every meal. When traveling anywhere, be flexible with your travel days in order to take advantage of any flight or accommodation deals.

4. Be Smart About Keeping Your Home Cool

Jersey summers can get rough. The humidity coupled with some really hot days can be miserable and force you to stay inside. On these days, it can be tempting to crank the AC. Instead, try keeping your thermostat set in the mid-70s when you’re home, turning your AC up a few degrees when you’re out of the house. Keep your home cool in other ways, like black-out curtains to block out the sun. Avoid cooking hot meals that get your kitchen boiling on really hot days. Summer is a great time to do some grilling outside or whip up something quick and easy in a crockpot. This will keep your house cool and prevent you from turning down the AC after your oven heats up the house. Keeping your thermostat at a reasonable temperature can save you up to 10% on your electric bill.

5. Shop Second Hand

Summer is a great time for refreshing your style. If you find yourself with the shopping bug this season, think twice before running out to the mall. Yard sales and flea markets tend to be in full swing during summer months, offering incredible deals on everything from vintage dresses to nesting tables for your living room. Thrift shops like Goodwill and second hand home improvement stores like ReStore are great places to score excellent finds for your wardrobe or your house. In addition to the money you can save by thrift shopping – exploring yard sales, flea markets, and second hand shops are a fun and unique way to spend a summer morning.

You don’t have to break the bank to enjoy everything New Jersey’s hottest months have to offer. Keeping your finances in mind during the summer will allow you to enjoy this season without finding yourself broke in the fall.

Should I Use My Emergency Fund to Pay Off Debt?

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Most financial advisors recommend having at least three to six months savings in an emergency fund at any given time. An emergency fund can be helpful in getting through the expensive curveballs life throws your way. Unexpected car maintenance, the sudden loss of employment, medical emergencies, and unforeseen home repairs are examples of events for which you may have to use your emergency fund. Sometimes, though, it can be tempting to use this money for expenses that aren’t necessarily true emergencies. If you have a big pile of debt, it may seem like using your emergency fund to pay down the balance is a good idea. Here are the reasons why you shouldn’t use your emergency fund to pay down debt, and a few exceptions where you might want to consider it.

The simple reason not to pay off your debts with emergency fund money is that most debt is not an emergency. This fund is specifically meant to cover unforeseen costs and expensive emergencies. Cars loans, student loans, mortgages, and personal loans all tend to have set, predetermined monthly payments. That means this debt is controlled and you know what to expect every month. As long as you can meet those monthly payments and expect to be able to continue to pay on time, there is no reason to dip into your emergency fund. Paying off your debt over the agreed upon timeline is not, after all, an emergency.

While it may seem like you have all this debt looming over your head, you have to remember that your emergency fund is specifically there to handle the unexpected. Your monthly car payment is not going to have the same impact on your financial stability as sudden and major car repairs from an accident. Where will you be if you use your emergency fund to pay off your debts only to find yourself dealing with a major financial emergency a short time later? Since you never know when a mishap like this will occur, it is best to save the emergency fund for actual emergencies.

There are, however, a few exceptions. An “emergency” will change in definition from individual to individual. Having kids or pets, owning or renting your home, owning your own business, and the stability of your employment are factors that will likely impact what you consider an emergency worthy of tapping into your emergency fund. This also goes for determining whether or not your debt is an emergency. Unmanageable, high-interest credit card debt, for instance, may count as an emergency depending on your specific circumstances. If you find yourself struggling to pay your monthly bills and are facing down the consequences of late or missed credit card payments, this could be enough of a reason to dip into your emergency funds.

Before you panic and deplete your emergency fund to pay off debt, think about why you have this unmanageable debt in the first place. The reasons behind the debt can also be a determining factor in whether or not to use your emergency fund. Was the debt unavoidable or due to some unhealthy spending habits? If your unhealthy habits are behind the debt, it may not be the best idea to dip into your savings and emergency fund. Understanding the reasons behind the debt is the first step to changing those habits and avoiding similar mistakes in the future.

Even in the event that you do determine debt to be a financial emergency, it is not a good idea to completely drain your emergency fund. You are better off leaving your emergency fund alone (or continuing to build it) while you make the minimum payments required on your debt. Debt-swapping, or replacing your high-interest debt with a lower-interest option, should be considered before dipping into savings. If you are able to pay down the debt a decent amount, you could justify using a small portion of your emergency fund to finish paying off the debt, but even this should be a last resort.

When it comes down to it, emergency means emergency. Being honest with yourself about your financial situation is the first step to proper money management. It takes a lot of hard work and discipline to build up savings or an emergency fund. Don’t let that hard work go to waste! At Veitengruber Law, we can help you come up with debt solutions to stay on top of your financial situation so you don’t have to consider dipping into your savings.

4 Ways to Start Building Your Savings

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For a lot of people, the idea of having any money to save can be laughable. When you’re working paycheck to paycheck and struggling to make ends meet, it might seem impossible to put any amount of income away for the future. After all, what is the point of saving $5? But saving any amount of money is worth it. Studies have shown that having even $500 in savings can help immensely in the event of an emergency. So while the standard advice for a savings goal is six months of living expenses, every little bit helps. If you are new to saving money, or recently had your savings drained, here are a few ways to build your savings account or emergency fund.

1. Pay Yourself First

Whether you are building your savings account for a big purchase, to fulfill a life goal, or for retirement, the best way to achieve your savings goals is to pay yourself first. A lot of people make the mistake of trying to save the money they have left over at the end of the month—and often find they don’t have any money to put towards their savings accounts. Before you have the chance to spend the money on anything else, put it into a designated savings account.

In order to make sure you pay yourself first, you must get a good handle on your budget. If you can determine what your income and expenses are, you will have a better idea of how much money you can safely put towards savings every month. A budget will allow you to be realistic about your savings goals, while also curbing your excess spending. For example, if you notice you are spending a lot of money eating out, make an effort to cook at home more often and then put the extra money into savings. Every little bit does matter! When creating your budget, make savings the ultimate goal and allow your spending choices to reflect that goal.

2. Make Building Your Savings a Habit

Another good way to build your savings is to make it a habit. It matters less how much you are saving each month; it’s more important that you are consistently depositing money into your savings account. A great way to do this is to set up an automatic deposit. Most banks will let you automatically deposit a set amount of money from your checking account into your savings account on a specific day of your choice. The first few days after pay day is a good automatic deposit day. With automatic deposits, you may not even notice the money is missing from your checking account in the first place. As this “habit” will largely go unnoticed, making it a very easy way to save!

3. Look for Sneaky Ways to Save Even More Money

After you have been saving for a while, you will have a good idea of your income, expenses, and budget. At that point, you should critically examine your spending to see where you could eliminate expenses in order to allocate even more of your income to savings. It is always a good idea to put “extra money,” like bonuses or tax refunds, into your savings. Make sure you are taking full advantage of your employee benefits. If your employer offers transportation reimbursement, matching retirement savings plans, or insurance, you can save money by taking advantage of these benefits. If you are job searching, look for employers who can help you achieve your financial goals.

4. Create a Separate Emergency Account

Once you have an established savings account, it might be a good idea to consider a separate savings account labeled as an emergency fund. Having an emergency fund that is separate from your savings account can ensure that even when facing an unfortunate financial event, you won’t lose all of your savings in the process. With a savings account and an emergency fund, you can plan for unforeseen medical expenses or an unexpected car repair while still putting money away for your future.

Saving money can give you peace of mind and a sense of financial security. Knowing you have the financial resources to get through some of life’s many hurdles is a powerful feeling. Every dollar you put into savings is an investment in your financial future. Everyone has to start somewhere, so start saving today!

Top Ten Money Saving Tips for Healthier Living

Cut coffee out of your budget (or at least brew it at home!)

If you have a daily caffeine habit you’d like to kick, let all the money you’ll save by cutting it out of your daily routine serve as an extra incentive to help you achieve that goal! However, if you are among the lucky folks who can enjoy coffee in moderation, there’s no need to deprive yourself even from a daily coffee habit. Just try to avoid coffee stands and restaurants where coffee is costly. Instead, consider investing in a home coffee machine like a cartridge coffee maker or an espresso maker, a reusable travel mug and even a milk frother if you prefer more gourmet-style drinks. These fancy gadgets can be more affordable than you think and will easily pay for themselves within a month or two if you’re a regular coffee drinker. Home coffee makers are convenient and easy to use, and reusing your own mug everyday also has a positive impact on reducing your carbon footprint to help protect the environment.

 

Clip online coupons from the convenience of your home computer

When people think about clipping coupons, it often sounds tedious to go through the newspaper and find relevant coupons each week. However, there are dozens of reputable websites online that offer both printable coupons that can be used in-store and coupon codes that can be used at online retailers. Anytime you’re about to make an online purchase, be sure to search your favorite coupon sites like Retail Me Not or Coupons.com to make sure you’re not eligible for any additional savings, a free gift or free shipping before committing to a purchase.

 

Seek out deep discounts at the grocery store

Did you know that every grocery store puts items on sale that aren’t even advertised in their weekly circular? That’s right! By knowing where to look you can save yourself even more money on your weekly grocery bill. If you’re looking for a dinner to cook the same night you shop, check out the butcher’s counter or the deli counter for discounted items that are close to their expiration date. There is absolutely nothing wrong with the reduced price food items, but they need to be prepared and consumed within a day or two in order to be guaranteed fresh. Many grocery stores also have a clearance section filled with pre-packaged, non-perishable and often seasonal items (think organic Easter candy!) they are closing out.

 

Cook and meal prep at home more to avoid buying lunches out

While eating out can be a fun experience to occasionally treat yourself to, eating out regularly can really dent your budget and your health! Even cheap fast food meals add up quickly, not to mention they aren’t the healthiest options with which to fuel your body. By always bringing a lunch and/or snacks to school or work you will be less likely to succumb to the temptation of eating out or pulling up to the drive-through window when hunger hits. Bringing lunch from home will save you a ton of money over the course of a year and even over the course of a month.

 

Cut back on trips to the salon by DIY

While treating yourself to an occasional trip to the salon should not be forbidden, try to limit the number of times you go to the salon every year. By purchasing a couple bottles of nail polish in your favorite colors and investing in a good quality nail file, with a little practice you can often achieve a salon-quality result at home. Recruit your best friend or significant other to trim your hair between salon haircuts. You can also successfully deep condition your own hair at home and even color your own hair at home for a fraction of the cost if you have a willing helper and a little patience.

 

Call your cable, internet and phone service providers to negotiate a discounted rate—whether you’re a new customer or not!

If you’re in the market to switch companies, now is the time to capitalize on the new customer discounts! Make sure to always inquire about their new customer rates any time you switch service providers. However, even if you’re an existing customer, it’s always worthwhile to call your providers periodically and ask them about any current promotions in your area and customer loyalty specials. You’d be surprised by the amount of money you can save just by asking.

 

Review your insurance policies

Call your insurance company to find out if you’re eligible for any multi-policy or multi-car discounts, non-commuter policies and safe driver discounts. If you have teenagers behind the wheel, ask if your insurance company offers a discounted rate for good grades. Your insurance company may also offer a discount for having extra safety features on your vehicle.

 

DIY your own all-natural cleaning products

Chemical cleaning products are not only expensive, they are also bad for your health! There are several inexpensive and effective alternatives that are much safer than most pre-made cleaning products you can buy at the store. Baking soda, vinegar and hydrogen peroxide are all extremely affordable cleaning staples that you likely already have on hand in your pantry or medicine cabinet that can be used as key ingredients to make multiple cleaning products (think window cleaner, dishwasher tablets, toilet cleaner, etc.) easily and at a fraction of the cost of what you would pay to purchase each product individually. There are many informative video tutorials available online that will walk you through how to make your own all-natural cleaning products from scratch. After you’re done making your own products, you will have a powerful, safe and effective arsenal of cleaning products at your disposal.

 

Use apps to find the lowest gas prices

There are so many free and inexpensive apps that can help consumers uncover extra savings nowadays, even on necessities like gas! Special gas tracker apps find the lowest prices in real time and even show you where the gas stations are located on a map. This is a great option if you live in or nearby a city with multiple gas stations to choose from. Prices are always changing, so be sure to check before you fill up your tank each time.

 

Try consignment shops for clothing—buy, sell and trade!

Consignment shops are a great way to save on high-quality, gently used and sometimes even never-been-worn clothing. Even if you’re not in the market to purchase any new clothes, consider consigning, trading or selling your gently used clothes to a consignment shop to earn some extra cash and clear some clutter out of your closet while you’re at it!

When to Break Up With Your Financial Advisor

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An important indicator of your overall financial wellness is how well you balance spending with saving and investing. You should always keep the end game (retirement) in view while simultaneously being able to enjoy life while saving for your children’s college education, if applicable. In order to coordinate all of the pieces of your financial puzzle most effectively, many people choose to work with a financial advisor.

Unlike many other professional partnerships you may form, your relationship with your financial advisor or financial planner can become more like a friendship. Because many people stay with the same financial planner for years, you can easily feel connected on more than a professional level. This feeling increases if you are also in the same circle of friends or live in the same town.

No matter how much you enjoy the company of your financial planner, if your needs simply aren’t being met, you have some decisions to make. You’ll either have to explain to your advisor exactly how he’s letting you down and what he can change to retain your business, or you can start looking around for someone new.

Reasons to consider leaving your financial planner:

  • Distrust – Being able to trust your financial advisor with your money is extremely important. If you’re asking questions and not getting answers that feel authentic, that’s a red flag.
  • Poor communication – While it’s true that financial planners are often very busy, if your phone calls and emails go unanswered for lengthy time periods, you’re paying for a service that’s sub-par.
  • Unclear expectations – The best financial advisors will lay out a plan when you first team up with them. The plan should include input from you regarding your specific goals for your assets and what you’d like to see happen. If your advisor never created an investment policy statement for you – it could signal that he’s skimping on his other duties as well.
  • No contract – As with any professional who provides you with a service that you will be paying for, your financial planner should present you with a clear contract at the beginning of your relationship that outlines his duties to you and what he needs from you as well. Without a contract, you have no way of knowing what to expect.
  • Distance – If you’ve been working with a financial advisor from afar and have recently decided to take a more active role in your finances, letting go may be your only option.
  • No fiduciary standard of care – In other words, if your advisor (or his firm) doesn’t put your interests ahead of their own, you have a very good reason for finding a new firm.
  • Fees – If you’re currently unhappy with your advisor’s fee structure and this is set by his firm, you may not be able to get the arrangement you’re looking for without finding someone new.
  • Additional services – Many people today are interested in working with a financial advisor who goes above and beyond making sound investments for them. Tax planning and basic budgeting advice are two services cited by clients who were unhappy with their current financial planning firm.

At Veitengruber Law, we pride ourselves on our vast network of professionals and we attend networking meetings every month to stay immersed in the financial, legal and real estate markets. We are more than happy to assist you in finding the NJ financial advisor that meets your needs. Give us a quick call [(732) 852-7295], or fill out the contact request form on our website. We’re always here to help!

Image credit: Nicolas Raymond

If You Live to be 100, Will You Run Out of Money?

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With constant advances in medicine, the human race is outliving its life-expectancy and then some. While most of us would likely choose to live forever if given the chance, the fountain of youth (unfortunately) doesn’t exist. Therefore, just as we’re celebrating living longer, we’re also faced with the hard actualities that come with life at older and older ages.

Yes, modern medicine is keeping hearts pumping and lungs breathing while also strengthening bones to hold us up for an extra decade or two. However, simply being alive doesn’t equal being able-bodied enough to earn a living, and that’s where we encounter a significant wrinkle (pun intended).

The retirement years used to be called ‘the golden years,’ because workers put a significant amount of money toward their retirement savings (many via 401Ks) and steadily paid down their mortgages until their homes were paid off.

Even now, many people are able to enter retirement rather comfortably. Typically, though, many retirees soon realize that their monthly expenditures are dipping a little too far into their savings each month. At first, this isn’t a problem, and it may never become an issue for those retirees who live to a “normal” age.

For those older Americans defying their expected life span, however, planning for several extra decades of living wasn’t on their radar when they were young and generating income. Pensions that were calculated during their working years simply isn’t enough to last as long as they’re living.

If you have aging parents who are pushing the odds and living longer than you ever dreamed – consider yourself lucky to have your loved one(s) around! You may become responsible for their care – or at least their finances – if they live well into their 90s or even to 100 and beyond.

You may have to contend with independent-minded adults who want to continue living on their own and caring for themselves. The problem, of course, becomes how to financially make that happen. At this late stage in the game, it’s difficult to fix the fact that your parents simply didn’t plan on living so long. You may have to move one or both of your parents into your home if a retirement home is not desired and/or feasible.

The important takeaway from the fact that people are living longer and running out of money is this: YOU still have time to make sure the same thing doesn’t happen to you and your spouse.

While it may seem impossible to pack away any more money for retirement than you already are, you might be surprised. Talk to a financial planner now, while you’re still smack dab in the middle of your money-making years. You likely still have time to advance your career upwards in order to increase your income.

You can also consider taking a second job, even if only temporarily, or during summers, in order to pad your retirement account substantially. Your financial advisor will be able to put you on a course to save as much money as possible with the assumption that you, too, will be living a long (and now prosperous) life.

Image credit: Gwenn Seemel

Self-Discipline: The Key to Controlling Your Overspending

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Whether your most pressing financial goal is to pay off money you owe or to increase your savings and investments – the most important skill you’ll need is self-discipline.

Self-discipline can feel inaccessible for some people, and a lack of self-control can leave you feeling disappointed and defeated.

It’s important to note that self-control is one of the most challenging behaviors to master. Mastery of self-control and self-discipline is so tough to achieve because it involves changing behaviors that occur in high-emotion or even addictive situations like:

  • eating
  • losing weight
  • arguing with someone
  • smoking
  • playing video games
  • drinking alcohol
  • spending money

Some people are born with more than their fair share of self-discipline, while others struggle with self-control from a young age. If you fall into the latter group, don’t be alarmed! Self-discipline is a skill that can be learned. It’s not an easy skill to develop, but with the proper dedication, you can train yourself to be more self-controlled.

Spending money is fun and can feel rewarding and emotionally satisfying, which is why many people go shopping to relieve stress, boredom, anxiety or depression. Thus, it is easy to begin associating spending money with a feeling of happiness. As this behavior and response become habitual, it will lead to more and more spending in order to continue feeling happy.

Replacing a Bad Habit With a Good Habit

To gain discipline when it comes to over-spending, you’ll need to start practicing the responses you want to have regarding money. Over time, you’ll notice a shift in how you feel about spending as your new responses begin to replace the bad habits you have currently. Some tips to help you:

  • Set up a budget. You’ve heard this before, but we’re going to say it again. A good budget is a necessary building block on the way toward financial freedom. You need to start practicing spending only the amount of money that’s in your budget each month in order to make it into a habit.
  • Stop using credit cards. Cut them up or put them in a shoe box at the back of your closet. Do whatever it takes to get them out of sight and, most importantly, out of your wallet.
  • Question every purchase. Shop mindfully, asking yourself if you really need each item that’s made its way into your shopping cart.
  • Treat yourself. Once you’ve stuck to your budget for an entire month (or longer), reinforce this behavior by rewarding yourself with something you’ve been wanting (within reason).
  • Punish negative behavior. If you go out-of-bounds budget-wise, deny yourself something you enjoy until you get back on track with your spending.
  • Open a separate bank account. If you don’t already have one, a savings account is great idea. Every time you have an urge to make an unnecessary purchase, instead: put the equivalent amount of money into this account. Also, set aside a set dollar amount to go directly to this account from every paycheck.
  • Be accountable to someone. If your finances are really dire, you may need to be accountable to a debt relief professional at first. They can help you find additional ways to reduce your debt if you need more help. You can also have a close friend, spouse or sibling keep you accountable as you work to turn your new money choices into habits.

Studies have shown that developing self-discipline is possible at any age. It’s also been shown that you can get better and better at honing your self-control the more you practice your new habits. By changing your behavior from overspending to living within a budget, you’ll be able to pay down any debts you’ve accrued and build up your savings account!

 

Image credit: Luke Hayfield