Friday, January 13, 2017

Pennies Make Dollars, Dollars Make Sense

Remember that I gave up on making New Year resolutions a while back. I stand by that, but I have started making some New Year changes. The biggest one is to do with money.

When I think of saving money, I normally think of a regular account with my bank. That's not savvy enough. Plus, no matter how much I save in the bank account, I always find reasons to dip into those funds. Always. That money is too freaking accessible for someone as impulsive as I sometimes am.

I'd heard about ways to save with small investing apps. There are a lot of them that sound interesting:

Image result for i see broke peopleWhat sounded great about most of them is the small amount required to start an account. What I balked about at first were the monthly fees. Also, I was nervous about the idea of ~gulp~ investing. The only time I've ever been involved with investments is through employer offerings of IRAs and 401ks. Thinking of handling any kind of investments on my own sounded a little scary. Plus, my budget is so tight I actually call it a "budg". 

Still, I knew that I wanted to do something so I had to work on my doubts and concerns.

First, paying a buck-a-month fees to invest in a couple of plans is not that scary. I could give up chewing gum and never feel the loss of that.

Second, yes, my budget is tight, but only because I can be less than smart about my spending. 

My first step was to trim the "luxuries" from my budget. Here is what I cut:
Image result for broke people memes
  • Netflix was the first to go. I don't own a TV so streaming is my one way for that kind of entertainment. It's a $7.99/month charge I can easily give up. I have Amazon Prime which gives me access to TV shows and movies. Also, I get all the other Amazon Prime benefits that I do use a lot. (I have no idea why I didn't cut Netflix sooner.)
  • Planet Fitness was a $20.06 monthly fee that was a little frivolous. I could have had the $10/mo option if I used the gym enough to warrant a membership in the first place. My nephew has a couple of pieces of gym equipment that I can use anyway. 
  • I used to give myself a $40/mo allowance for makeup and other girlie goodies. I cut that down to $10. I don't need to spend so much money on hair and makeup until I am getting paid for my appearance.
  • I canceled my $15/mo Audible account. That hurt the most. Sort of. I listen to and read books the way some people watch TV. It's my addiction. I rarely am without a book in my hands or ears! The only way I am surviving this cut is by depending on my local library and Overdrive accounts for my fix. (By the way, I highly recommend these for anyone who loves books.)
Image result for champagne budget beer tasteI am making some other minor cutbacks too. When I grocery shop, I only get what I know for a fact that I'm going to use what I buy. I realized that this was a cut I could make when I looked in the freezer and saw meats that I'd bought a couple of months ago. 

Basically, I've cut over $70 a month from my spending. That might not be a lot to some people, but that's a huge amount to someone in my position. What the heck was my broke, champagne-tastes behind thinking all this time?!                         

I can now invest those amounts. Any type of investing involves risk, but I'm only risking the money that I was previously just giving away. This is a classic win-win for me.

For anyone who thinks that small-change investing is not worth it, take a glance at this:




That there is a screenshot of my Google Rewards history. All those tiny amounts in the middle column have added up over the last few years to the $120 amount you see at the top of the right-hand column. That's how a pennies make dollars. Seriously. 

So, yes, investing small amounts of money can make a lot of sense for people who can't afford to deal with big investment firms. As for myself, I'm really not that high-maintenance. If a ton of money suddenly rained down on me, the first thing I'd do is lock myself inside a nicely stocked cabin with book-lined walls!

I decided to start with Stash. It was a pretty painless set-up process. Now, I am looking at a couple of the other app choices. I can't recommend this for anyone else, but I can tell you that this is one New Year change of habit that I feel really good about.

Peace
--Free

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