July Money Challenge
Take an #everydayspendee challenge and try to devote some time each day of this month to improve your money management. Each day, we are going to provide you with one advice, tip, challenge or insight on how to get better with money so you can focus more on what matters to you. Some of the tips help you to save money, some help you to prevent them from spending. Some are interesting thoughts about people behavior when it comes to money for you to think about your spending behavior. Make sure you follow us here on Medium or on Instagram not to miss your daily update.
Day 31/31: Invest in you
To improve money management is a long journey and if you are really serious about it, you should dedicate regularly some time to it. It is worthy to spend time tracking your income & expenses, analyze your cash flow, create a monthly budget or check your bank statements. You should also think more about your savings. Do you have your emergency fund set up? Are you saving up for retirement? What are you planning to do with the rest of savings? Do you have any investment plan in mind?
Try to keep in control of your money and answer all your money question. You will soon see progress and improvement.
Day 30/31: Invest in others
Elizabeth Dunn, Daniel Gilbert and Timothy Wilson did an empirical research to find out how could people get more happiness for their money. One of the advice, they are recommending is to use money to make other people happy, which will lead to your happiness as well. The reason for that is that humans are very social beings which means that anything we do to improve our social connections makes us more happy. As a part of their study, they gave two groups of people either $5 or $20 dollars and randomly told half of the participants to spend their money on themselves, while they told the other part of participants to spend their money on others. The research showed that those, who spend it on others, were happier at the and of the day.
Day 29/31: Think in days, not years
The reason why we under-save is usually because we don’t start saving soon enough. The problem is that saving will becoming more difficult as time passes, as it is forcing you to save bigger portion of your income. That is why Neil Lewis of the University of Michigan and Daphna Oyserman of the University of Southern California decided to run a research trying to find a way how to make people start saving sooner. What they found out is that people planned to start preparing saving earlier if the deadline was expressed in days, rather than in years.
Day 28/31: Listen to your own music while shopping
This study was examining what is the difference of shopping behavior in wine store while different kind of music is playing (classical music versus Top Forty). Researchers found that people were spending more money while classical music was playing. Also, they would buy more expensive wines. Another study examines how can music in groceries stores influence your shopping decisions. During this experiment, French or German music was played in in-store display of French and German wines. When French music was playing, consumer were shopping more for French wines, while when German music was playing, German wines outsell French ones.
To make sure that you will not be influenced, listen to your own music.
Day 27/31: Get your wardrobe to the minimum
Reducing all your material things to minimum is a good start for everyone who wants to get serious about financially healthy life. The easiest would be to start with the wardrobe. As we usually use only a third of our cloths, we can save a lot by not spending bunch of money on clothing that goes fast out of fashion. The advice here would be stick to classic pieces, that you can easily combine with everything. Check out a brave story of Michelle, who took a challenge of a whole year without spending!
Day 26/31: Make a monthly budgeting plan
Making a monthly budget will help you to spend money only on things you’ve planned for, so you will avoid all unpleasant surprises. It is super easy to create a monthly budget. However, it might take you more time when you are creating it for the first time.
First, write down your monthly income. Then put down a list of all expenses that you will have in following month. If you are not sure, check overview of your previous month in Spendee. When writing down a list of expenses, start with regular payments such as mortgage, rent or electricity bill. Then continue with food, transportation and entertainment expenses. Using zero-budget method, you should get zero when subtracting expenses from income.
When your budget is set, create a separated budgets in Spendee for each category. Make sure that you track all your expenses properly and regularly and Spendee will make sure to notify you when you are in 50% and 75% of your budget.
Day 25/31: Try to stick to 30/20/10 rule
This is a magical rule, that helps you to keep your budget in shape. It is especially helpful if you are a newbie to budgeting and you are not sure where to start. According to this rule, you should allocate 50% of your income to necessities such as rent, bills and groceries. 20% of your income should go to savings. It could be emergency fund, retirement or any short term savings. The rest, 30 % could be allocated to wants like entertainment, shopping or eating out. Please, bear in mind, that this rule does not fit everyone. Your income could be too big or too small to follow the rule, so you might adjust it accordingly. However it is definitely a good starting point for anyone who want to do be serious about budgeting.
Day 24/31: Remove Credit Cards from Online Accounts
If you have credit cards saved in your online shopping accounts, it can be very easy to click one button to buy something. If you remove the cards from these accounts, it makes you take the time to enter all of your card information every time you buy something. This time and effort can be enough to make you think about the purchase and if you really need what you are buying. It can often be the difference between making an impulse purchase and saving for something that you really need.
Day 23/31: Millennials and their money habits
Not having enough money saved is one of the biggest fears, Millenials are facing in these days. Even though According to Bank of America’s 2018 Better Money Habits Millennial Report, Millennials are having quite a strong money habits, not having saved enough is stressing them out.
47 % of Millennials has over $15.000 saved while 16 % of them has over $100.000. Their top priorities when it comes to saving is emergency fund, retirement and house.
Still, Millennials are showing a strong self-control when it comes to saving, when 67 % of them is able to stick to their saving goals. Are you fitting into these statistics?
Day 22/31: Use money saving apps to shop
Apps for selling used items can help you save money when shopping. There are so many options to list your unwanted goods for discount prices like Craigslist, Letgo, and Decluttr. You can almost always find what you are looking for being sold in your area if you search through enough of these apps. Buying used things in this way can save so much money, especially on big ticket items like furniture and appliances. It is also good to look through Freecycle.org, a website for listing items to be sold for free, every once in a while to see if someone has listed something you could use.
Day 21/31: Investigate how much you are paying to your bank
Dedicate one hour of your time and go through your bank reports. See how much you are paying on fees, how much you pay for withdrawals and so on. If the amount of fees surprise you, research on different banks with better conditions. Now, with digital banks, you can create a bank account in few minutes without a need to go anywhere. Plus, those bank usually have better conditions and offers comparing to classic banking houses.
Day 20/31: Ride a bike
If you work close to where you live or often find yourself driving to places close by, riding a bike is a much better option than driving. Riding a bike is good for the environment, saves gas and parking money, and allows you to get some exercise. As long as you are not riding too far, it won’t take too much of your time either. Depending on how often you choose to ride instead of drive, your gas and parking savings can certainly add up.
Day 19/31: Make short-term goals
Ambitious long-term savings goals can be very hard to keep up with and can seem very overwhelming. The best way to attack this issue is to split your long-term goals into smaller pieces. Trying to put away $20 every week seems much more achievable and much less daunting than a much bigger goal. Breaking the goal up also keeps you on track and will prevent you from getting behind in your saving.
Day 18/31 Save for retirement
Retirement may seem far away, but you should start saving for this time in your life from your first paycheck. In some countries, money is taken directly from your salary, then redistributed among all retired people, while in some countries you are responsible for all of your retirement funding yourself. Either way, you will need money and it is a good practice to start building these funds as early as possible. Even though you should be eligible for a state support, it might be a good idea to open a commercial pension fund as well.
Day 17/31: Create an emergency fund
Start saving your emergency money right away. Just in case! You should be able to save 3 to 6 times of your monthly income before you start saving for something else. Emergency money are meant to be used in case something unexpected happen, such as loosing your job or being sick for a long time. You should first build this fund before investing your money in other things.
Day 16/31: Buy water, not Coke
Drinking more water has important health benefits and will help you save money. Water keeps your body hydrated and can be completely free. If you only drink water you stay away from other drinks like soda and juices that can be much more expensive and less healthy. Drinking a glass of water before meals can also help you feel more full for longer and help you save in the food category as well.
Day 15/31: Make saving goals
Before you decide on getting your money into shape, you should know what you are your main goals. If you want to save your money, clearly states how much you want to save and for what. It will be much easier for you, not to touch the money, if you know that they will be spend on your weekend trip or a new camera, that you want for such a long time :)
Day 14/31: Save any extra income you make
Throughout a year, you might happen to receive an extra income that you haven’t counted with. Maybe you receive a bonus at work, or you receive a dividend payout, financial gift or maybe some portion of your taxes got returned to you. It is usually tempting to buy something that you’ve desired for a long time, however it might be more beneficial in a long term to save all those extra money in saving account.
Day 13/31: Change to energy saving light bulbs
Switching to CFL or LED bulbs cost more than regular bulbs initially, but they save money in the long run. They not only have a much longer life than regular bulbs, but they use less energy and will save money on your electric bill. Some of these bulbs use only a quarter of the energy used in regular bulbs. You will also be doing your part in helping the environment by saving this energy.
Day 12/31: Clothing challenge
A new challenge is waiting for you! Next week, try not to spend your money on clothing and shoes, or at least try to lower your expenses comparing to last week or last month. We prepare few tips that help you to fulfill this challenge thus grow your saving fund.
#1 tip: Avoid visiting shops and online shops to resist the temptation
#2 tip: If you happen to be in a shop anyway, try to wait at least 24 hours before you actually purchase the item
#3 tip: If you still need to buy something next week, try to get items that are on sale or that are from second hand
Let us know on Instagram, using #everydayspendee how successful are you with this challenge.
Day 11/31: Use cash backs
Cash back programs are great way to be rewarded for your shopping. You can save just by shopping at a website using a link from cash back site. There are plenty of cash back sites, where you can register for free and immediately start using their perks. Cash back sites work by taking a commission fee. They receive this fee for every customer that buys something at a shop, and they give a piece of that commission back to the customer. The amount can differ from 1% all the way to 50%, depending on a product. Are you using cash backs while shopping? Let us know in the comment!
Day 10/31: Try not to eat in restaurants
The Food&Drink category usually takes up the biggest portion of people’s spending. Thus, it is a good category to to try to cut down your spending. The easiest way to save money in this category would be to not eat in restaurants and pubs. Instead, you can bring your own lunch during the work week. You can cook dinner for your friends and family instead of eating out at a restaurant. Also, since the weather is warm and pretty, you can invite your friends for a barbecue at your place or in a park.
Day 9/31: Automate transfers to saving account
Create a recurring transfer from your checking account to your savings account. Set it up so that as soon as you receive your salary, a given percentage is sent to your savings account before you start spending it. In a financially healthy world, you should be able to send at least 20% of your salary to your saving account. The rest of your salary should be distributed between lifestyle activities (30%) and essentials (50%). Don’t wait, open your internet banking and set up a recurring transfer right now.
Day 8/31: Buy experience instead of stuff
Elizabeth Dunn & Michael Norton did research and wrote a book, Happy Money, on the relationship between money and happiness. One of their key findings is that buying experiences makes people more happy than buying material things. One of the reasons why is that experiences are often enjoyed with other people, which brings us on average more joy than enjoying material things alone. Also, according to this study, buying experiences makes us happy prior to the experience, when we are looking forward to it, and also after the experience, when we share our memories with others. So next time you are about to buy something expensive, think about whether you want to buy the item or you want to try out an experience instead.
Day 7/31: Saver versus spender
Savers are usually patient with their money. They are always searching for the best deals, setting up saving goals, and looking forward to reaching those goals. When faced with a tough decision, they always choose to save over spend. If you are a saver, to get better with your money you should try not to save every penny you make and try to enjoy your carefully budgeted money instead.
Spenders are the opposite when it comes to their money. They know how to enjoy life with their money and they are also quite generous with financial gifts. The minute they receive their paycheck, they are pushing the “Buy” button. They are often the most impulsive of buyers and do not like to take their time making decisions. To get better with your money, try to look more into the future, budget for things you want to purchase and be more patient when shopping. Try to think more about your emergency and pension fund prior to spending all of your salary.
Are you a saver or a spender? Let us know on Instagram with the #everydayspendee hashtag.
Now that you know which side you lean toward, please bear in mind that it is important to look for a balance between the two in order to have a financially healthy life.
Day 6/31: Take cash, not card for a night out
By taking only cash when going out, you can only spend the amount you brought with you.
Even if you plan to spend only your cash but still take your whole wallet with you, it can be easy to go to an ATM or use your cards when you run out. By only taking cash and leaving the rest of your wallet at home, you don’t have this option.
Day 5/31: Cooking challenge
Weekly saving challenge! Don’t spend money on eating out next week. Make your favorite homemade meals instead. You can either really push it and cut all of your Food & Drink expenses next week or you can start slowly and try to decrease your Food & Drink expenses by at least 20%. Share your progress on Instagram with #everydayspendee hashtag.
Day 4/31: Track, track, track
Be aware of every dollar you make and every dollar you spend. Thanks to smartphones, there are plenty of tracking tools that help you stay on top of all of your finances from anywhere such as Spendee. Spendee makes the analysis of your past spending easy to understand so you can decide in a moment if you could afford to buy this new dress, or if you should leave it for next month. Tracking your income and expenses is the beginning. You can’t get your money into shape without proper tracking.
Day 3/31: Make shopping lists when going grocery shopping
Put everything you need to buy on a list and do not buy anything else. Having a list will make sure you only buy what you need and will make it much harder for you to be an impulsive shopper. You can use the classic pen & paper to make a list or Google notes is a good way to be able share your list with others if needed.
The easiest way to create a shopping list is by planning all your meals ahead of time, then buying only the ingredients needed for those meals.
Day 2/31: Use 24 hours rule
The 24 hours rule states that you should take at least 24 hours before you make an important decision. With this in mind, when you are about to buy something you don’t necessarily need (clothing, home decor, another book, technology), give yourself 24 hours, and if it seems like a good idea the next day, go for it. This rule is especially helpful when looking at items on sale during times such as Black Friday or the Summer sales season. If you use this rule and resist impulse buying, you will be surprised how much you will be able to save. Let us know how you doing by using #everydayspendee hashtag.
Day 1/31: Monthly saving challenge
Let’s start a new month with a saving challenge! Save 5 bucks (€ 5, £ 5, ฿ 150, 100 Kč) every day and save $ 155 (€ 155, £ 155, ฿ 4805, 3100 Kč)at the end of the month. See 3 tips that would help you succeed in this challenge.
#1 Timing matters
The easiest way of doing so is to dedicate one time a day, when you put the money aside. We recommend to set up daily recurring wire transfer to your savings account or use cash and put money in your piggy bank.
#2 Friends help each other
The second thing that could help you is to take this challenge with someone else, so that you have a partner in crime and you can motivate each other. If you don’t find someone who wants to take this challenge with you, make sure that you tell your family or friends about it. This will motivate you to keep saving. Use #everydayspendee hashtag on social media to let others know how you’re doing.
#3 Check your progress
The third thing that is definitely going to help you to fulfill this challenge is to check your everyday progress. You can set up a budget in Spendee for the final amount ($155, € 155, £ 155, ฿ 4805, 3100 Kč) and if you input everyday this transaction with special category (e.g.Saving) you can constantly monitor your progress towards the ultimate goal.
