Top 5 Budgeting Tips – Budgeting is a challenge for all of us, but if done correctly, can save us hundreds or thousands of dollars each year. If you get it right, you are setting yourself up for a much healthier financial future. It’s a great idea to take a step back, review your current budgeting approach, and adopt new ways to save some cash. Below are some of our tips to help you save!
- Budgeting can be done using a mobile application, such as Mint or Honeydue, to help you categorize your spending, and spot where you could spend less and save more.
- You could create a manual budget by tracking what you earn and what you spend on a spreadsheet.
- In 2021, around 80% of Americans used a budget to help them control their finances.
- Ways to save money include canceling unused subscriptions, shopping sensibly, and using low interest lines of credit when borrowing.
Tip 1) Write Your Budget Down Using An App Or A Spreadsheet
Most of us try and pinch the pennies where we can by buying cheaper alternative products, or making lunch rather than buying it. But, the best way to ensure that you are on top of your finances, thus allowing you to budget accurately is to write it down.
This doesn’t have to be on paper. Budgeting Apps are increasingly popular, with YouNeedABudget, Honeydue and Mint all highly demanded by smartphone and tablet users. These apps track your purchases, put them into categories for you, and allow you to review where you’ve been spending. If, for instance, you spot you’ve been spending a lot on takeout, you may decide to reduce how frequently you order that pizza. This is a decision that you may not have made without having the information presented to you by an app.
If an app isn’t quite for you, you can create your own manual budget, and it’s easier than you think. To do this, you simply have to track how much money you have flowing in, and how much you are spending. You can attach a category to this for yourself. For instance, if you’ve ordered a Domino’s, you can have a column labeled as ‘food and drink.’ Color coding your spreadsheet will allow you to see which categories you’re spending the most on.
Tip 2) Know Your Own Goals So It’s Easier to Budget
Many of us are budgeting to build up a savings pot, and many of us are saving to pay off a loan, debt or create a retirement fund. Whatever your reasoning, be clear of it. It will motivate you to keep going, by buying in bulk, shopping at thrift stores, running instead of paying for the gym or deciding to walk rather than paying for gas.
When budgeting, it is essential that you remember why you’re doing it. You can even create a chart to record all of your savings achievements on.
While you should know your own goals and strive to meet them, you should also remember that for new habits to reap rewards, it takes time. Don’t be surprised if your savings haven’t doubled one month after deciding to meal prep, rather than buying lunch out.
You may be looking to buy a house so read 11 Ways to Get You Closer to Having That Down Payment.
Tip 3) Prioritize Your Payments To Keep Within Your Budget
If you have debts to repay, think carefully about which are most economical to pay off first. If you have one debt with much higher interest attached than the others, this may be the most beneficial to pay off first. This is because, over time, the interest will become increasingly expensive.
You should also ensure that you pay the debts that are essential to comfortable living first. After that, some frivolous could be OK. In other words, put your food and electricity bills higher on your priority list than your Netflix subscriptions.
Importantly, any debts that hold collateral over you must be paid off to prevent you from losing that. If you have any secured loans, these need to be paid off according to your repayment plan. Failing to pay these off can result in you losing your assets.
Tip 4) Budget In Advance For Seasonal Changes
Take into account how your spending changes seasonally. December is infamously expensive, so don’t set yourself unattainable budgeting targets for this month in particular. Maybe you have too many friends’ birthdays in May. In that case, try saving that little bit extra in April and June, and go easy on yourself in May.
Remember, spending varies and that’s natural! If you’re someone that struggles to hold back on festive spending, you could create a separate savings account for ‘gifts’ or ‘holidays.’ That way, you provide yourself with a finite pot of money dedicated to getting you through these times, without worrying about digging too deeply into your savings.
Check out our Tips to Save at the Grocery Store.
Tip 5) Don’t Be Afraid To Ask For Help If You Need It
Loans services wouldn’t be so common if they weren’t so needed. Many of us need help at some point, and that is absolutely fine, but must be acknowledged.
Don’t drive yourself into the ground out of pride. Budgeting is great, but sometimes it doesn’t cut it if you find yourself in serious debt.
If you need help, think about where to seek it. You could ask a loved one for support, as these loans are typically flexible and bear no-to-low interest rates. You could ask your employer for a cash advance, which is essentially an early paycheck. If you need cash fast, you could apply for a payday loan. These are quick to attain and can help you if you’re in trouble, but they are attached to high interest. Wherever you seek help, ask for it if you need it. If you’re not sure which option is best for you, consult a financial advisor.