Many people make the same mistake of thinking that just because they have money for all their expenses throughout the month that they are somehow better with money than those who struggle with this. Whilst this is a possibility, the definition of being money savvy doesn’t include those people who spend their money recklessly or unnecessarily. Those people who struggle to make ends meet might struggle because they are putting money into their savings account each month as well as paying their bills. Don’t make this same mistake, use these 10 helpful tips for managing your budget instead.
When you’re setting up a budget for yourself or your family, do so realistically. You know yourself better than anyone else does so you know what you’ll be able to cut back on and what you likely won’t. It is not realistic to think you can get by on $40 a month for groceries – even if you are the most extreme of coupon-ers. Rather, take a realistic look at your bank statements and set realistic amounts for your budget going forward. If your goals are completely unrealistic then you are going to fall behind and consistently fail to achieve them.
Track Your Spending
I once saw a meme about how if you compiled all your slips and receipts together that you would make a tiny little book about why you are broke, I have yet to read anything truer than that internet observation. I realize it was a joke but it is so true! Make sure that you are tracking your spending habits, you don’t need to do this with a pen and book because there are loads of apps available for you to use. If you do find unnecessary expenses like old timeshares, then have a look at this Wesley Financial Group review for ways to get out of those fees.
Save For Bigger Purchases
Instead of paying off your bigger purchases, rather save for things like fridges and TVs because paying them off will end up costing you far more in the long run. There are some purchases that you can’t help but need help with making like houses and cars, but you need to limit those types of loans as much as possible. Even if you get offered the deal of a lifetime, I can assure you that you will save much more money by saving for the purchase instead.
Don’t Commit to Credit Plans
With the boom of eCommerce over the last decade or so, there are so many ways to apply for credit these days. If you wanted to, you could pay off pretty much any charge over time and with a boatload of interest charges that will be automatically bolted on each month. Limit your credit purchases by avoiding sales and only buying the items you need.
Most of us will run into some form of financial strife in our lifetimes, from unplanned expenses to medical bills – there will be something that we haven’t budgeted for that will catch us off-guard. You can avoid having to use your credit card in these situations by having your savings account that you can dip into when necessary.
Limit the Extra Spending
Cut back on unnecessary spending by bringing your coffee and lunch to work instead of buying them on the way to work. This tip alone will help you save hundreds of dollars, money that would be far better served sitting in your savings account. Being frugal with money doesn’t have to mean that you don’t splash out every so often, set yourself a realistic budget for your unbudgeted expenses – that way if a sale rolls around with something that you genuinely need for much less than you would normally pay, then you can still buy it.
Shop Around for Better Deals
In this day and age, there is no excuse for paying more for an item than you need to. Regardless of whether your purchase is big or small, you will always be able to shop around and find the best deal for you. The same applies to your groceries, look online for price comparisons between various retailers and then plan your shopping trips accordingly. The same applies to delivery fees, if you can get the same item somewhere else at the same price but with free delivery then the obvious choice would be to take advantage of the better deal but you would be surprised by just how many people don’t do that.
The only way you will truly be able to see if your budget is working would be to set realistic goals for the future. If you decide to save money each month, gradually increase the amount that you save so that you can save more over time. Goals will help you look forward to achieving something from all this financial work and achievements are the best way to stay motivated.
Manage Your Spending
Save your slips when you swipe for the next month and then make note of what you spend your money on. We often forget where and when we spend our money, we just know that by the end of the month it is gone. This doesn’t have to be the way you live your life, if you manage your spending habits I can guarantee that you will find ways that you can save money.
Pay Off Debt
Debt is one of the biggest financial killers and it tends to build up quickly once we start on the debt path. Some debt expenses are largely unavoidable, like mortgage repayments or vehicle repayments – these are generally healthy debts to have anyhow. The unhealthy debts are things like clothing accounts and excess credit cards. If you find yourself having to pay off a pair of shoes with your credit card because that is the only way you think you can afford them then I strongly urge you to stop. If you can’t afford to pay for those shoes with cash, then chances are you cannot afford those shoes in general and you should be looking for a cheaper pair to buy.