*This is the 18th day of the One Month Spending Freeze Challenge. Please click here to see all of the posts in this series.*
Earlier in the month, we discussed the importance of writing out goals for a spending freeze. Without a goal for your money, it will not be utilized to its maximum potential, and you might just head to the mall the day after the spending freeze is over and spend it all on clothes that you don’t really need.
© mtsaride / Dollar Photo Club
I hope that instead of spending all the money you will save this month that you will make a plan for it. If you didn’t make a plan on the third day of the spending freeze challenge, do it now.
When you plan to save your money, there will be no question about actually putting that money aside. It’s when you put off or make excuses about saving money that you never do it.
Ideas for Money Saved During a Spending Freeze
There are several ideas for what you could do with the money you will save during a spending freeze. Ponder all the ways that you could use the money you save this month, and decide on the one that will make the biggest impact on your financial situation.
The best place to put it is in an emergency fund if you don’t already have one. An emergency fund will be just what you need for more financial security. Without it, you risk losing everything.
Pay Off Debt
Already have an emergency fund? Great! The next best way to use your money is for any debt. Paying only the minimum on your debts just increases the amount of interest you’ll pay. Interest is not your friend! Unless you are on the lending side, of course.
So put that money toward one of your debts, if you have any. It could be the one with the highest interest rate or the one with the smallest balance. Find out which way is best for you in this article on Best Debt Repayment Method – Snowball or Avalanche? on Cents and Order.
Now, if you have an emergency fund of at least $1,000 and you have zero debt, you can start thinking about putting your money away for something more. Here are some ideas:
- All your necessary bills for next month
- Taxes (if you know you’ll owe come tax time, save for this!)
- Emergency preparedness
- A bigger emergency fund
- A house
- Child’s education
- Home improvement
You might be interested in reading more about savings goals and using your money in smart ways. Here are some posts that can help:
Remember to be specific about your savings goal and plan to follow through.
Tomorrow we’ll talk about where you should put the money you have saved so it’s out of sight and you don’t touch it!
What will you do with the money that you have saved during this spending freeze challenge?