Money Saving Expert Andrea Woroch on Budgeting and Managing Your Finances
Nationally recognized money-saving expert Andrea Woroch has helped consumers find simple ways to save more and spend less for nearly a decade. She’s passionate about sharing ideas and tips to help you live on less without having to sacrifice. According to Andrea, by making a few small tweaks to your daily and monthly spending is all that’s needed to achieve your dreams within your means.
We had the opportunity to speak with Andrea, and she shared her insight on what we thought our readers would like to know.
Some can find budgeting challenging. Any advice to offer that helps others stick to a budget?
Budgeting doesn’t have to be difficult as long as you do 3 things:
Set your budget baseline by reviewing all your expenses and figuring out how much you spend on each line item. There’s a good chance that you may be overspending on things you didn’t realize, like that monthly app subscription you forgot you signed up for.
Identify areas where you’re overspending and come up with a plan to cut back in those areas. However, instead of trying to change everything at once which can feel overwhelming and cause you to give up, start small and make small changes. For instance, if you’re trying to cut back on take out, eliminate one weekly food delivery and cook at home that night until it becomes a habit. Then, move on from there. This is easier to adapt to and doesn’t feel as intimidating or overwhelming.
Track your expenses each month, either by writing down your purchases and expenses in a worksheet—here’s my free budget worksheet you can download, or using an app like Mint or Wally that does that for you. This holds you accountable to your spending and saving habits and helps you spot potentially bad buys before they happen.
When your financial situation is uncertain, what sort of changes can you make in bills or expenses to better manage your income and finances to help you save money?
Review recurring expenses to see if you’re paying for services or memberships you don’t use or don’t need. This can include extra video streaming, a game subscription app, a beauty sample box or even that unused gym membership.
Negotiate with service providers. Call you cable company to see if there are any new promotions or consider cutting the cord in favor of a streaming service like SlingTv. Consider the average cost of basic cable is $60 and SlingTV packages start at $35, offering popular channels like HGTV, CNN and ESPN, you could easily shave $25 off a month by switching.
Curb discretionary purchases and expenses. With businesses opening, it can be easy to go overboard with spending on nonessentials especially since it feels good to make a return to normal living. Just make sure that whatever you’re buying is built into your budget so it doesn’t cause you to go into debt.
Save on everyday purchases. No matter how much you try to cut back on nonessentials, there are things you have to buy such as groceries and cleaning supplies, and sometimes bigger purchases like a new appliance. When it comes to these essential purchases, spend time comparing prices and always look for a coupon to stretch your dollars. Sites like CouponCabin.com offer coupon codes for thousands of popular retailers, from Macys to The Home Depot so you can always find a discount and potentially save hundreds of dollars. When you’re done shopping, take pictures of your receipts using the Fetch Rewards app which earns you points good towards free store gift cards to retailers like Walmart, Amazon or Target. These gift cards can be used for a splurge, gift or toward a house hold purchase.
Compare insurance rates. Run a quick online search to see what competitors are offering to see if switching insurance providers make sense as it could result in better coverage and lower fees. If you have the best rate, other options for saving on auto and homeowners insurance include increasing your deductible (just make sure you have your deductible total in savings in case of a repair) or ask about a pay in full discount, rather than paying monthly.
If you have a partner or spouse that doesn’t seem to follow the budget, what are some ways to get them on the same page and stick with it?
Outline shared goals for the short and long term and discuss how your budget will aid you in reaching these goals. Just make sure that the budget isn’t one-sided. Meaning, you have to make compromises and figure out how it can work for both of you.
Make sure you each have some fun money to spend however you want without judgement from your partner. Then set spending rules in which you discuss any large purchase over a predetermined amount (based on your budget).
What are some common money mistakes that many people don’t realize they make?
Not saving enough for emergencies. When you’re paying down debt, you may put all your extra money towards those debt payments, but it’s also crucial to save money at the same time. This way you have money to cover unexpected bills so you don’t start adding debt back to the credit cards you recently paid down.
Ignoring life insurance needs and putting off creating your estate plan. These both are crucial for protecting your family’s financial future. Even if you don’t think you have enough money, you need a will to make sure your wishes are met in case something happens to you such as how your personal belongings should be distributed and who will care for your kids, or even pets. You can set up a will within minutes online at sites like TrustandWill.com and this will include power of attorney, Health directives and guardianship for your kids, and costs just $89.
Overspending on groceries. The average family wastes $1866 in food every year. Not everything you buy from the grocery store is an essential. It’s easy to overbuy food when you don’t have a plan and then end up tossing food that spoils because you bought too much. Therefore, make sure to meal plan and only buy the ingredients you need for those meals, always cross referencing ingredients you have in your pantry and fridge to make sure you don’t double up.
When dealing with any sort of large amounts of debt, what are some of your suggestions for improving your situation?
Consider consolidating your debts using a low fee personal loan. This can help you save on interest and also help you stay more organized. When you have debt across multiple accounts, it’s easy to lose track and feel overwhelmed by different payment due dates. Consolidating your debt gives you just one payment date to remember, you save on interest and every payment is the same so it’s easier to manage.
What are some signs that you might be carrying too much debt?
When it comes to your credit cards, you should be paying those off in full each month. If you’re carrying a balance from month to month, it’s a sign you’re overspending and are living beyond your means. This is a quick way to waste money on interest fees!
Also, your credit score is a good indicator of your financial health. An excellent credit score is a good indicator that you aren’t carrying too much debt as your credit utilization rate plays a factor in your credit score. If you have a poor to fair score and your credit utilization rate is high, meaning you are using a lot of your available credit, it’s a sign you may have too much debt.
If you are struggling to pay your bills, it’s a sign you’re carrying too much debt.
If you were considering a personal loan for debt consolidation, what should you know?
Read the fine print to understand all the terms and what types of fees you will be charged. Interest fees are one thing, but there could be origination fees — meaning, you pay a fee just for taking out the loan. There are options out there where you don’t have to pay this fee so do your homework before applying.
Andrea Woroch says you don’t have to be good with numbers to be good with money. She’s the Money Saving Expert with practical advice on family finance, budgeting, smart shopping and frugal living.
Her stories and advice have been featured in popular media such as The Wall Street Journal, New York Times, USA Today, Money, Forbes, Cosmopolitan, Real Simple, Reader’s Digest, and many other publications.
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