If you take a look at your monthly spending habits, can you see where you go wrong? For some of us when we get paid, we just spend. Often times our spending can become thoughtless and that’s where we don’t leave enough room in our budget for the unexpected to happen or maybe for a bill we forgot was coming due. And that certainly doesn’t include that bit of money we’re supposed to be saving.
The key to solving this problem is often (but not always) budgeting. Getting paid isn’t a free pass to spend money on what we want when we want it. I strongly believe that even the most financially secure people budget. Why? Because you don’t save a lot of money if you run around spending it all the time — that’s likely what got them to wealth in the first place. So, let’s start now; and here are some budgeting tips to get you going on a budget that works for you, your needs, and your income!
1. Use Apps
Look around, no one around you is without a smartphone that has an app or two on it. We depend on our phones to be our lifelines for so many things, why not include our finances in that? Earlier we covered apps to help you save money, and this is a great place to start on saving money and smart spending. Even better, most of these apps do all the hard work for you… you know, the boring and tedious stuff? Yeah, that. Skip that part and put an app (or two) to work for you.
2. Must Have vs. Optional
We all do a lot of optional spending. This is the pitfall I was talking about earlier. So, it’s important that we separate our expenses into what is a must and what is optional. For example, paying your electric bill is not an option. Most of us don’t want to live without power so let’s get that bad boy paid. Meanwhile, eating out sounds great, but let’s skip that and eat at home more inexpensive (and healthy!).
Now, organize these two into a list. Must have on one side, optional on the other. Divide your income now. You can allot 50% of your income to your must haves. Your optional, however, you only get to dedicate 20% of your income to that. The remaining 30% of your income is divided between spending expenses (hello, gas for your car) and 10% goes into savings.
3. Save Money On Food
This can be tricky, I admit it. Fast food is becoming cheaper and cheaper making it a more viable option than cooking and prepping our own meals. However, learning to cut some corners on your grocery bill will have you see the inexpensive and healthy side of driving past all those fast food joints. For example, check out the “junk mail” you receive each week and shop the sales. Be sure you have a savings card for each store in your area, and then visit the store’s website to see if they have any coupons that you can load onto your card to save you even more. There are ways to save without clipping stacks of coupons, but if you’re up for that challenge then there’s nothing stopping you there, either!
4. Open a Separate Savings Account
Chances are that if you cannot see your money, you’re not spending. Jump online with your financial institution and open a savings account. The trick here will be to not get a debit card for this account, but have the ability to transfer money from your primary account to this savings account. Each month when you’re working on that must haves vs. optional list, throw some money into this account. Out of sight, out of mind and you’ll get saving more money that will be a bit more difficult to access when you just want to splurge on something fun.
This is just as important as the rest of our tips. If you don’t allow yourself a little breathing room to splurge, then budgeting likely won’t work for you. Most people like to feel as though they’re working for something — and not just the lights being on at home either. Go out with friends, take in a new restaurant, or go out on the town. Your life shouldn’t stop because you’re working on a budget.
Are you working on a budget? What other tips might you have that can help others struggling to work out a budget for them? Join us on our Facebook and discuss with us some more budgeting options.