Watch Your Spending Habits with Nine Year Mortgage
How much did you spend last month on groceries? How much do you usually spend on groceries in a month? Can you answer those two questions on cell phone and cable TV spending, dining out, insurance, gasoline, etc? If you know how much you spend in these various categories you’re miles ahead of most Americans. For the rest of us, ask yourself this question. If you’re not tracking your spending habits, who is? Nine Year Mortgage has found that understanding how you are spending your money each month is the first step to taking control of your personal finances.
Nine Year Mortgage suggests the following list as a great starting point for understanding how you spend your money.
- Find your most recent bank statement from your primary checking account. Next to each charge, make a note of what the purchase was for. You should find a handful of things that pop out at you as clearly unnecessary expenses, and going forward your mental notes will save you from making those same unnecessary purchases again. We often buy things on impulse that, after further reflection, we realize we didn’t really need.
- Now group the items together by making a group category at the end of each item. You’ll likely need categories for food, entertainment, dining out, clothing, etc. Now total these categories up to see if the totals surprise you. For example, a $4 coffee from Starbucks 25 days per month adds up to $100 per month, or $1,200 per year on coffee. Think about these recurring expenses on an annual basis. Would you rather drink coffee from home and have an extra $1,200 in the bank, or is that $4 daily dose worth the cost? Only you can decide, and what might be worth it for you may not be the case for someone else. This is an important point to realize.
- Take a look back at your list now and consciously decide what expendable purchases you want to eliminate, and which ones you prefer to keep making. Remember, it’s ok to spend money on wants, as long as you have enough money for your needs. And remember, applying at least some extra money towards paying off debt and establishing a savings account are both needs.
- How much money are you spending on debts like your credit card bills each month. How much is that annually? Credit card companies make a lot of money off interest, after all, someone has to pay for all the frequent flier miles they give away.
- How much of your paycheck is left over at the end of every month? How much did you transfer into a savings account?
- Experts at Nine Year Mortgage recommend saving three to six months of living expenses aside as reserve cash for a “rainy day” fund. How much money do you spend each month? Let’s say it’s $4,000 in after tax spending. That means you would need between $12,000 and $24,000 in reserves to fall back on. How much do you have saved now? So how much more do you need to save? Start today. Even though you might still have some debt to work on paying off, it’s important to start establishing your emergency savings account now. When an emergency arises, it’s important to have funds set aside, otherwise you’ll be forced to use credit cards and increase your debt load.
- Let’s take a minute to consider any major purchases you’ve made in the last five years? Do you anticipate any of those coming back in the next two years? If so we need to plan for them. Are there any major medical procedures, home repairs, car purchases, etc. that are inevitably coming up? Let’s factor those into your budget now.
Hopefully this exercise has helped you understand where your money is going, and also identify some potential areas to save. This was not intended to be a comprehensive list, but more a simple exploratory exercise without the need to use a computer or complex math to complete.
If there is one point of emphasis that Nine Year Mortgage recommends you take away from this, it is to make sure your monthly expenses are less than your monthly income.
As long as you are bringing in more money than you spend, you can work on eliminating your debt and building your savings. Now that you have an idea on your monthly expenses, and a rough outline of a budget, it’s time to calculate how much debt you have and how long it will take to pay it all off. This is critical information to help you understand the true trade off of your everyday spending on non-essential items. Don’t be too hard on yourself, most people have no idea how much their total debt is or how long it will take to pay it all off.
Some people use computer spreadsheets and amortization schedules to calculate this information. While this is possible, there is an easier way. Nine Year Mortgage is currently offering a free financial analysis with no obligation of any kind. Simply complete the form on the Nine Year Mortgage web site and a financial analyst will be in touch with you quickly to work on your analysis.
You won’t need to divulge any sensitive information to complete the analysis, just the generic details of your income and debts, like interest rates, balances, and payments. The Nine Year Mortgage computer algorithms will do the rest, and your personal finance analyst will be available to interpret the results and help you understand your plan. You will learn how much debt you have, what your total payments are, how long it will take you to pay off all of your debt, and also how much money you will pay in interest charges to the banks and credit card companies along the way. Read a sample of Nine Year Mortgage reviews from some of the thousands of satisfied Nine Year Mortgage clients.
Remember, there is no cost or obligation to get your free analysis, simply complete the form on the Nine Year Mortgage web site to get started.