Get out of the money rut

Break Free From Your Money Rut

Stuck in a Money Rut? Here’s How to Break Free

Ever feel like your money is just sort of . . . going nowhere?  It’s a feeling that can creep in when nothing’s really off track, finance-wise, but at the same time, you’re not really making progress toward any significant goals.  You’re not saving or paying down debt.  Your budget needs some adjustment.  You know you could probably be getting more out of your money, but you just haven’t gotten around to it.

Sound familiar?  If you feel like your household finances are stuck in a rut, it may be time for a quick review and overhaul.  The good news is that it doesn’t take much time to break out of a financial rut.

Here’s how to spend less, save more, and generally turn things around in about a month:

  • Set a financial goal or two. It’s incredibly easy to get stuck in a financial rut if you don’t have any goals to work toward.  Want to get un-stuck?  Start by identifying a few goals that you’d like to work toward.  Do you want to pay down some trailing holiday debt?  Are you saving for a down payment on a house?  Do you want to pay cash for your family’s vacation this summer?  Pick one or two goals as a first step toward revitalized finances.
  • Review your budget. Any financial plan has to start with a well-planned budget. If you already have a budget, sit down and review it to see if it’s really working for you.  Are there any categories you want to change?  Do you see any “problem areas” where you can’t seem to stay within budget?  How much do you want to put in savings?  How much can you set aside to help accomplish your new financial goal(s)?  If you don’t have a budget, make one!  Check out this easy guide to creating a budget.
  • Cut out credit cards for 30 days. I understand the appeal of plastic – I really do.  Credit cards can give you access to some pretty great benefits, like cash-back rewards and airline miles.  And responsible credit card use can help boost your credit score, which is always a plus.  But the big drawback to credit cards is that people tend to spend more when using them.  On the other hand, people tend to be much more frugal when spending cash.  So if you are a credit card user, try switching to cash-only for one month.  Leave your credit cards at home when you go shopping.  Pay cash for groceries, dining out, and other day-to-day expenses.  Keep your receipts, and at the end of the month, review your spending and compare it to your credit card spending.  See if you notice a difference.
  • Give up one unnecessary expense for a month. Looking for a way to save more money?  Try cutting out one non-essential expense (think fancy lattes, DVDs, fast-food lunches, or salon manicures) for an entire month.  Put the money you would have spent into your savings account.  You might be surprised at how much you’ve saved.
  • Schedule one “spend nothing” day per week. A “spend nothing” day is a good way to cut spending and be more mindful about what you do with your hard-earned cash.  Pick one day of the week and designate it a “spend nothing” day.  No buying groceries, gas, fast food – nothing.  Do this for one month.  See if you notice a significant change in your budget or savings.

It’s fairly easy to get into a money-related rut – especially when you do the same thing day in, day out.  But by setting a few goals and changing a few behaviors, it’s also very easy to get out of that rut and back on track.

So, what are you waiting for?  Start setting goals and get out of your rut today!

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.

Click "More" for important American Credit Foundation client transition information