I recently shared how my husband and I paid off $76,000 of student loans in less than 3 years. While this was a huge accomplishment, it can be intimidating to know where to start.

Today, I’m sharing 3 simple ways you can immediately improve your finances.

1. Determine Why You Want to Spend Less: 

It’s almost the end of March, so I imagine most of us have dropped off from our goals for the new year. Did you hope to get in shape, lose weight, or maybe change your finance situation? I think the reason most of us have a hard time sticking to new goals is because we don’t have a good enough reason to have the goal in the first place.

I think we need a clear vision and reason for a goal to actually achieve it. What’s your reason, your “why”?

If you don’t have an answer, pause and make this clear before starting a radical new change in the way you handle money.

Think about your future and how finances fit in. I get the impression that many people have accepted living with debt, and/or gotten comfortable living with little to no financial margin. Do you live under the “if you have it, spend it” mindset?

Here’s some key areas worth considering when thinking about finance goals:

• Do you have debt to pay off?
  Paying off debt is one of the quickest ways to make money. Imagine what you could do if you kept or invested the money going towards debt this month! Not only do you keep it, you’re not losing interest every month. Our loans were ~6% interest…aka someone was making money off of us vs. the other way around (dang it!).

• Do you have an emergency fund and savings?
  An easy way to prevent debt is having cushion in your budget. When the car needs repair, do you have money set aside, or would you need to use your credit card? I recommend building towards 3-6 months savings. If this would be too big of a goal today, set an achievable goal to work towards. Maybe start with $500-$1,000 and then increase again once you hit your goal.

• Do you hope to save for a home?
  Perhaps you want to save for a down payment on a home. I think this is a great goal, but I do recommend having some savings before purchasing a home because of the risk you take on with unexpected repairs and other expenses.

• Do you want to save for the future?
  Have you thought about the future and your finance goals? Are you saving for a family vacation? Replacement car? Retirement? If not, would you like to be?

• Do you wish you could give more?
  What if you could increase your giving and make an impact with your monetary resources? What if you could manage your resources and build a lifestyle conducive to regularly increasing your giving?

For Drew and I, all of the above were and are our goals. We knew having $76,000 of student loans was a huge hindrance in pursuing the other goals, so that’s why we tackled it first.

2. Determine What You Currently Spend:

Genius idea, right? I know this is simple, but it’s so important. If you see a nutritionist they’ll probably ask you to do the same thing (i.e. write down what you currently eat). You’ve got to know where you are to know where you want to go.

Try this. Write down everything you spend money on for a month. I suggest a month so you capture recurring bills (rent/mortgage, car insurance, utilities etc.), in addition to general spending. If you can’t stick to tracking it for a month, start with a week (then repeat x3…just teasing!).

After measuring current trends, learn from your spending habits and get motivation to start cutting back in areas. Could you eat out one less time/month? Shop when you have a need vs. want? How often do you spend $1-$3 without even realizing it (ordering a drink at a restaurant, getting coffee or snack on the go…)?

3. Focus on Areas You Can Save Money:

Find areas in your budget where you can save money, then set goals and stick to them! Again, not rocket science, but super important.

The areas that typically have the “lowest hanging fruit” to save money are groceries, spending, and eating out.

If you start using a budget and set a goal for how much you’ll spend in groceries, I’m confident you can find ways to cut back each month. Maybe you currently spend $400/month and you can shave off $30/month by being intentional with what you purchase.

It’s crazy how you can easily spend $10-20 more each time you get groceries if you don’t have a plan! Think about it, if this is true, and most of us don’t need convincing that it is, this means we could save $100/month just by having a goal!

Where would you prefer that $100 go each month?

Additionally, $400/month was what Drew and I intentionally budgeted for the first year of our marriage. If you’re not currently using a budget for groceries, I bet you could easily save 15-20%/month by starting a simple budget! Do the math for motivation!

*Note: it’s just my husband and me, so these numbers are based on feeding two people.

Here’s some grocery saving tips we used:
We would often cut back on buying sweets, snacks, and drinks (easily saves $20/each week). We’d frequently choose to eat spaghetti in efforts to make that month’s goal, or eat a bland meal instead of trying a new and exciting recipe (ingredients add up quick!). I’d check the budget before getting groceries, and add up what I thought I was about to spend before checking out.

Make a game out of it. Try to balance the budget without going a penny over. Put stuff back if you need to. Not because you have to, but because you choose to for your preferred future!

As mentioned here, we used the YNAB budgeting tool to help us stick to a budget. One thing I love about this tool are the reports it provides so you can look back at spending habits (data below).

To illustrate how much you can save in the areas mentioned above, check out what we spent in these categories over the past 3 years (the time-frame in which we were paying off our loans):

Groceries:
2014: $4,285
2015: $3,730
2016: $4,350

Spending*:
2014: $2,385
2015: $1,600
2016: $1,840

Eating Out*:
2014: $880
2015: $630
2016: $1,830

* “Spending” includes the “entertainment” budget Drew and I share, as well as the “fun money” and “food money” we each individually have.
* “Eating Out” is a budget Drew and I share, unlike our individual food money listed under “spending.”

I’ve emphasized 2015, because this is the year Drew quit his job to pursue a career change. Literally living on one income, we tightened down our budget even more. This is important for you to see because this was the year we were most intentional with our budget.

Check out the total savings all of this adds up to:

If you compare 2014 to 2015, we spent a total of $1,500 less in 2015. If you compare 2015 to 2016, we spent a total of $2,000 less in 2015.

How many of you could pay off a small student loan or credit card bill with $1,550 or $2,000? The small changes in how we budget for groceries, spending, and eating out go a long way!

Here’s how much we saved in each category/month in 2015 compared to 2014:

Groceries: On average, we saved ~$45/month, ($4,285-$3,730)/12.
Spending: On average, we saved ~ $65/month, ($2,385-$1,600)/12.
Eating Out: On average, we saved ~$20/month, ($880-$630)/12.

So there you have it; cutting back a little each month goes a long way! What one thing can you take from today’s post to apply to your finances?

Please share if this was helpful! ❤

.Em