Every once in a while, my husband and I like to daydream about one day owning a house. Or paying off our combined student loans. Or being able to afford part-time child care so that I can pursue my dream of being a full-time writer. You know, the things millennials can only daydream about because they are quite literally out of reach.

Anyway, as an avid reader of The Financial Diet this mom knows that the only way we are ever going to get ahead financially is to stop eating avocado toast and going out for coffee.

Just kidding.

We don’t do either of those things. No, the only way our little fam of four is going to get ahead is to make a budget, eliminate extraneous spending, and save any and all we can. Or do side jobs. (See The Penny Hoarder for more on that.)

Anyway, I thought it would be marginally helpful if I were to put together a short list of some of the steps I take to stay on top of things so that we can buy a house in the next quarter century. Or afford to eat avocado toast. Whatever.

Step 1: Make a Budget

This is always, always, always going to be step one. Building your budget is essential for saving. Sticking with a budget is essential-er. It comes down to basically figuring out how much money you have coming in (i.e. your income) and how much money you are spending (i.e. your expenses). It is simple and requires no more than basic arithmetic skills, but it is amazing how many times I find out that my peers haven’t made a budget for themselves.

There are a lot of apps and software out there that can help you figure out the best budget. I personally like to use Mint.com because I find it to be intuitive, automatic, and free. You can also go the old school method and use an Excel spreadsheet. You can go even older school and use a checkbook, but really, who even writes checks any more?

As I said, the first step in building your budget is figure out how much you make in income (after taxes). Then add up all your expenses like rent (cause who can afford to buy?) and utilities, student loans, groceries, Netflix, car insurance, gas, etc. Subtract your expenses from your income. This number will ideally be positive. If it is negative, whoops! You are spending more than you make. You are officially up to your eyeballs in debt.  Maybe. I mean, you’d know better than me.

After you have subtracted all of your expenses from your income, take a look at the number. If it is positive, this is your excess money. This money should go into savings. In our house, this money usually goes into buying children’s books (like these 7 funny books for preschoolers ). Or yarn. Or burritos. But this extra money, the money you don’t have allotted to your essential expenses, is the money you can use to save for the things you want like vacations, houses, new clothes, etc.

Determining where your money is going is what a budget does.

Okay, so now you’ve figured out how you spend your money, or, in other words, you’ve made your budget. What do you do when that pesky difference between expenditure and income is negative or not as much as you would like?

Step 2: Cut Your Spending

Cut your spending!

For me, that means deleting any apps on my phone or tablet that encourage spending. No more Amazon app. No more food delivery apps. No more online shopping. No more fast fashion.

I was finding myself spending far more than I would like to admit on Amazon. I can’t even tell you what I was buying. It was probably cheap. And it probably seemed worth it at the time. Did I need the stuff I was buying? Nope.

Do you need all the stuff you are buying? 

Ask yourself, “Do I love it? Do I need it? Can I live without it?” If the answers to those questions are “no, no, yes” in that order, then DON’T BUY THE THING.

Optional additional things to stop spending on are cable and high speed internet (do you really need it to be that fast? And you and I both know you spend most of your time binge watching Netflix.)

Step 3: Make a Meal Plan

This is where that whole “health conscious” thing comes into play. One of my biggest expenses is groceries. Lately, I’ve been focusing on my health and diet and unfortunately that has been really making a dent in my wallet. Stocking my pantry with nut flours and raw honey didn’t really help with the whole saving money thing, but there are definitely ways to do it without breaking the bank.

The best way: make a meal plan.

Sit down on a Sunday night and think about what you plan to eat for breakfast, lunch and dinner for the next seven days. Plan it out, then buy only what you need from the store to make those things. Coordinate your meals so you can use the same ingredients for multiple meals.

Consider making food ahead of time to prepare for days when you don’t feel like cooking. I can’t tell you how many times I’ve eaten out or binged on fast food because I was too lazy or tired or just didn’t want to cook. Popping some already prepped food into the microwave or into a skillet or blender saves you time, saves you money, and keeps your healthy eating game strong.

If you’re like me, and you find yourself spending HUNDREDS a month at the grocery store, a meal plan can get you to hit your grocery budget and often times with money to spare.

If you need help coming up with meal plans, feel free to contact me!

Step 4: Shop Around

One of the best ways to save some dough is to switch it up with your expenses. Shop around and see if you can cut your cable and internet costs. Compare prices for car insurance, or health insurance, or rental insurance and find the one that will save you money. If it has been a while, you may be able to find better rates or even renegotiate the rates you currently pay with the companies you are with.

This sounds tedious–it kind of is–but it is so worth it.

Step 5: Pay Off Higher Interest Debt First

Paying off debt is exhausting, especially when you’ve racked up a lot of it. Be it credit cards, student loans, or car payments, it is easy to feel overwhelmed and buried.

Where do you even start?!

Well, a simple entry point is to go through your debt, looking at the interest rates on any loans you have, and pay off the debt with the highest interest rates first. 9 times out of ten that will be credit cards.

Credit card debt is the worst in my opinion. The rates are terrible (think 18 – 22%) so the majority of your balance is not even what you spent, but what the credit card company is charging you. GET RID OF THAT FIRST. Maybe even chop up your credit cards. Switch to cash. I don’t know. But it’s bad. Pay it off first.

Then, go through any student loans or car loans you have. Make your payments. Often times (as I said above) you can renegotiate the terms of your loans. If you are struggling to make payments, see if you can refinance. Talk to your providers, talk to your bank. There are always options and most services are willing to renegotiate. It is in their best interest because they want to get paid.

Step 6: Stick With It

Changing a habit takes time.

Sticking with a budget can be difficult. Don’t lose hope. Sometimes it can take a couple weeks or months to see real results. Especially if you are starting from in the red (negative) or with a significant amount of debt.

I like to think of the budget as a scavenger hunt.

Where can I find extra money? What changes can I make that free up that extra $10 or $20 dollars?

If I stop eating lunch out on work days, that saves me about $9 a day. 9 x 5 is $45 a week. That’s about $200 a month. One simple change, and I just freed up about enough money for a car payment. Or a student loan payment. Or $200 for savings. Or a part of my kid’s preschool.

That feels so good.

I’m not saying that you can’t ever eat out again. No way! Treat yourself! But budget for it. Give yourself room to breathe, but also pay attention.

Just like when you diet, you count your calories, or you control your portions. You are mindful of what you are putting in your body. Well, a budget is the same.

Be mindful of where you are spending. Think about what things cost, what you can save, what you can let go of, and be conscious of your decisions.