Please welcome a guest post by James Smith.
If you are like me you might be up to your eyeballs in debts, but still love crafting. So what’s a girl to do?
I’ve found that almost all of the tips that apply to budgeting our home finances can be applied to our crafting habits. But bear in mind that if you truly want to get out of debt fast you may have to either cut down on your monthly crafting expenses or figure out a way to monetize your hobby. That could include either starting a blog, starting a business, participating in local craft fairs, or selling online.
For those of us who are facing overwhelming student debts that are beginning to affect our credit score and weigh us down stress-wise, it’s important to craft a plan to both manage our budget and work to get out of debt – at the same time!
If you decide to monetize your hobbies so that you start to see a return on your investment it may take some time to get your business going. In the meantime, follow these tips to satisfy your crafting itch without getting yourself more in debt.
Set a budget
When you first start budgeting you will need to note even the smallest expenses like groceries, coffee, meals, craft items, clothing, transportation, rent, and utilities – basically all the items you need to survive (did I mention coffee and craft items?)
A large number of people have adopted an envelope system which allows them to separate weekly allowances for each category and using this money for all their everyday expenses. Accounting your expenditures will help you track your expenses, hone in on problem areas, and control them accordingly. This will also give you control even before spending, as you will keep noticing how the envelope is getting thinner and thinner as the month wears on, and help you make changes to your habits that result in better money management.
Set money aside for crafting
Once you have a budget in place, create a separate new crafting account. You can also use the envelopes system to ensure you don’t go overboard in your spending each month. At the beginning of the month transfer a preset amount to the separate account or into paper envelopes. For the more tech savvy, there are also apps like Mvelopes, You Need A Budget (YNAB), and others that utilize digital “envelopes” to help you budget your expenses.
Once the money in the account is spent or you’ve used up all the funds in that envelope, that’s it! You’re done! No using the credit card, writing post-dated checks, or using the money meant for other expenses to satisfy your insatiable crafting desires.
Connect with other crafters in your area to save money on shipping fees for specialty items. Pool money to buy items in bulk and share with your family, friends, and fellow crafting mavens. Remember to scour auction sites for deals and clearance sections for seasonal items. Stay aware of every upcoming sale and coupon available for use in your local stores. Also, sign up for store mailing lists and search the internet for coupon codes every time you shop. If you don’t’ use the online coupon codes when they’re so readily available (thank you the internet!) then it’s like you are just throwing your money away – money that you could be spending on other supplies and materials!
Use credit cards wisely
If you don’t want to use a cash-only system it’s still a good idea to make a budget and review the difference between your wants and needs. Try to use your credit card only for the things you truly need.
Keep a note of the interest rate on your credit card(s) to ensure your current rate is not higher than other offers. If it is, consider transferring the balance to a card with a lower interest rate – or call the card company to renegotiate based on your other offers in hand.
Always do a thorough check on credit card statements. It is possible that even machine generated data have some errors. It will also enable you to ensure there were no un-authorized transactions using your credit card(s).