Wish you had a financial game plan tailored to your priorities, lifestyle, hopes and dreams? You can start with this sneak peek excerpt from “Financially Fearless: The LearnVest Program for Taking Control of Your Money,” the new book from LearnVest C.E.O. and Founder Alexa von Tobel, CFP®. Available for preorder today, so you can be one of the very first readers!
Here are the best tips–from our users, our LearnVest Program experts and me—that will help you transform your spending habits and keep you on track.
1. Implement the PERK System
Try sitting down and reviewing all your expenses in each category to determine which costs can be Postponed until a later date, Eliminated from your budget, or Reduced going forward, and which expenses you absolutely have to Keep (hence the acronym PERK).
2. Lower Recurring Bills
Go to LowerMyBills.com to see if you can lower your recurring bills, like cable and cell phone. Bear in mind you can contact these companies directly to negotiate and make sure you have the most efficient plan for your needs. These two tips can work for pretty much any bill or expense.
3. Pay Per View
The average American cable subscriber spends $900 a year on the service. But how many of us watch all those channels we’re shelling out the money for? If you currently pay for premium cable service, test whether you really use or need it by calling your provider and putting the service on “vacation mode.” After a month of doing without five different MTVs and 17 different “on demand” channels, you can decide whether to restore or ditch the extra service.
My guess is that instead of getting every channel imaginable, you’ll be fine if you swap out traditional cable for Hulu Plus or Netflix, which are (at the time of writing) only about $8 a month and both offer on demand TV and movies. You could also consider a set-top box, such as Apple TV or ROKU, for under $100, which allows you to stream a variety of digital content (TV shows, movies, etc.) via the Internet.
4. Never Pay for Music
If you have some favorite artists or go through cycles of mild obsession with certain albums, then use a free service like Pandora or Spotify. It will cost you only if you really hate the commercials. Not only will these services let you listen to the exact songs you want to hear, but they will also introduce you to new music you never knew you loved.
5. Calculate Value
Each year, American women ages 30–49 spend an average of approximately $1,200 on cosmetics alone. That’s $12,000 over a decade, enough to buy a car! And it’s not just women: The industry sold $1.5 billion worth of men’s grooming products in 2010.
I’m not saying to cut good-quality beauty products out of your life (although I do recommend checking out generic brands to save); I’m just suggesting you pay attention to value, which takes into account not just price but also the number of times you’ll actually use the item. To figure out your cost per use, simply divide the cost of the item by the number of times you use it. This is an equation I keep in my head every time I shop.