Spending money is easy, especially when we don’t even have to swipe our credit cards, write a check, or dig out cash. Here are a few tips for keeping your budget tight in the digital age.
Between online retailers that save your credit card information and cell phone apps that make our lives more convenient, it is easy to bust a well-intentioned budget. For example, let’s look at how easy it is to spend on an ordinary Tuesday:
7:45 a.m.
You’re late to work after school drop off but need caffeine to get through the day. No cash, no problem. You can pay for that latte with the Starbucks app on your phone. Bonus: order through the app, and your caffeine fix will be ready for pick-up without having to wait in line.
Damage: $4.70.
10:10 a.m.
An e-mail from J. Crew tempts you with a 30%-off promo code and free shipping. You hadn’t planned on doing any shopping today, but you head to the website to browse. Twenty minutes later and — Point. Click. Done. A new dress and sweater are on the way. Damage: $132.85 (but hey, the shipping is FREE).
6:15 p.m.
The fridge and pantry are bare, a trip to the grocery store isn’t happening tonight, so you head to the DoorDash app on your phone. Once your family battles it out over whether to order Mexican or Chinese, dinner is on its way.
Damage: $68.50 including delivery fee and tip.
8:30 p.m.
The kids are in bed. Lunches are packed for tomorrow. Laundry is in the washer. You’ve poured yourself a glass of wine and kick back on the couch for the first time all day. The movie you‘ve been wanting to see isn’t on Netflix or Prime but is streaming on-demand via your cable provider. With one click of a button on your remote, it’s yours for the next 48 hours — with the charge added to your monthly bill.
Damage: $5.99.
Total damage: more than $210 you had no plans to spend. Gone, on a Tuesday.
If only socking away savings was as simple as spending it.
Accredited Financial Counselor Andi Wrenn has a few tips to help get those unexpectedly expensive days under control. Wrenn’s been mentoring military spouse financial counselors for more than a decade.
Coffee App.
Indulging in that latte just three times a week adds up to more than $730 annually. Think about how much you can afford and are willing to spend on your caffeine fix each month and load that amount on a gift card. When it’s gone, it’s gone.
Tempting e-mails from your favorite retails.
There’s a reason retailers clog up your inbox daily. They’re banking on the “spend to save” theory to get you to buy that pair of jeans you don’t actually need. Wrenn recommends unsubscribing from those retailer e-mails. If you don’t see the e-mails, it’s less likely you’ll be tempted to shop. And when you are in the market for a new pair of running shoes or black pants, a quick Google search will alert you to any discount codes, promo codes, or free shipping offers out there.
Manually enter your card.
Wrenn offers one more tip when it comes to online shopping. Google, Amazon, Shopify, PayPal and retail websites offer to save your credit card information making online shopping as easy as possible. “Don’t opt-in to that feature,” she says. Forcing yourself to grab your wallet and manually insert that credit card number and expiration date gives you more time to think about the purchase you’re about to make.
Be aware of what you’re spending.
“Having that additional hurdle is going to make you more aware of what you’re spending.”
With new statistics from the Federal Reserve showing the average credit card debt for an American household is more than $8,500, Wrenn advocates even another hurdle to keep credit card spending in check. “Wrap a piece of paper around that credit card, with the words “Do I really need this?” written on the front.
It’s important to decide if you really need to order groceries online, subscribe to those fitness apps or pay for video streaming subscriptions. Wrenn admits there are times the cost of convenience is worth it. “The important part is to make sure it’s in your budget,” she said.
The best app for your budget
The one digital convenience Wrenn does push?
“Use a spending app. Track what you spend. It’s the best way to figure out exactly where your money is going each month. Then, set aside a certain amount for these conveniences.”
“I never tell people to give up everything they love, whether it’s online shopping, getting your groceries delivered, or coffee shop lattes, but set a specific amount for those treats,” Wrenn concluded.
For more stories like this, including how to save, build retirement, navigate insurance and more, download our 2020 Military Money Guide.
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