budget living money management

Don’t Be Blonde About Money

blondeThere are tales as old as time that paint blondes as the less intelligent being of their brunette and redhead counterparts. I’m not sure if that’s true. Does our hair color really influence how intelligent we are? As a financial planner I would like to say no, but for argument’s sake here’s how not to blonde with your money.

Of course, all of these tips are relevant to women all over the world of all shapes and sizes.

Here are five ways to not be blonde and improve your finances today:

Don’t be impulsive

Spending money on things we don’t need is a budget and savings killer. It’s also a good way and quick way to get into debt. If you avoid impulse purchases you will have more money to spend on more important things; you’ll also have more money to save. The next time you’re in line at the grocery store and want to buy three magazines for $6 each, just ask yourself “Is this a blonde money move?” If the answer is yes, then put down the magazines and walk away.

One way to avoid impulse purchases (although I’m one to talk because I bought a new car on an impulse purchase, on my lunch hour) is to avoid places with temptation, don’t window shop/browse and stay out of stores and avoid malls unless you need to buy something.

Learn to budget

Creating a budget can help you live within your means, choose where you want to spend your money (hopefully on the most important priorities) and avoid getting into debt from overspending. Learning to budget is a huge way to turn your financial life around if you’re currently being blonde with your money. Sign up for a budget tracking software such as Mint.com or You Need a Budget and start tracking your spending for the next 30 days. From there you can see where you’re spending, where you’re overspending and where to make cuts.

Not only is living without a budget a big money mistake, but living on a short term budget is also a big mistake says US News. “Research suggests that creating an annual budget instead of a monthly one works best, largely because we feel less confident in our annual estimates, so we tend to add more cushioning for unexpected expenses. In one study, college students underestimated their monthly expenses by 40 per cent while overestimating their annual expenses by 3 per cent.”

Check your credit score

You may think your personal financial situation is fine, but do you really know? The easiest way to determine your creditworthiness is to check your credit score. I order my full credit report, including the credit score, once a year to make sure all information is up to date, to ensure all accounts are being reported properly and to make sure there is no fraud on any of my accounts – or new accounts active in my name that I did not open.

It’s a good idea to check your credit score at least once a year so you know where you stand financially in case you need to apply for a new loan, credit card or mortgage.

Limit your fun money

There’s another popular saying that says “blondes have more fun” and I’m wondering if that’s also true when it comes to our money. If you’re blonde do you spend more money than your brunette or ginger friends? If blondes do have more fun, then they may also be spending more money.

The easiest way to live within your budget, avoid impulse purchases, stay of debt and continue growing your savings account is to limit your fun money. Don’t cut out personal spending all together because then you’ll really want to spend, but limit the amount you spend on non-essentials to about 10 per cent of your after-tax income. This is let you have fun and still have enough money for all of life’s necessities.

Get rid of debt

Pay off your debt sooner than later. If you have credit card or loan debt cut other spending and make extra payments to get the balances paid off as soon as possible. When you’re debt free you save money on interest costs and you can then use that money for something else. I’m sure you can think of better things to do with your hard earned money than use it to make credit card payments, right?

 

About the author

TK

TK is a Certified Financial Planner with over 15 years of experience in the banking industry. She started blogging in 2009 after the market crash. TK enjoys helping people plan their retirement, pay off debt, invest wisely, live on a budget and enjoy happy financial lives. You can see what she's up to on Twitter @TahnyaKristina.

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