Do you want to know why so many people find budgeting difficult?
It’s because when you decide to create a budget, you’re not just choosing to spend your money differently. You’re also planning to change your habits. If you’ve ever tried to give something up like smoking or drinking before, then you’ll know how difficult changing a habit can be.
The easiest way to change a bad habit, is to take up some new, contradictory good ones instead. As you get used to these new behaviors, you’ll gradually be able to tune out the urge to continue with your other, more destructive activities.
So, what kind of budgeting habits can you put into place for your financial future?
1. Always Know Where you Stand with Your Money
If you’ve ever bought something on your credit or debit card and thought to yourself, “I hope this payment goes through”, then you’re already in a bad place with your budget. The only way you can change your spending habits is to begin by making sure you know where your money is going. It’s no good just crossing your fingers whenever you spend some cash.
Get into the habit of tracking every expense, so you know how much progress you’re making towards your goals. This will also stop you from buying things on a whim. When you check your balance and realize that buying a takeaway will leave you with no money for the rest of the month, you’ll think twice.
2. Compare Every Cost
Think that comparison websites are just for your insurance or utility bills? Think again. These days, you can compare the cost of almost everything. You can even use a comparison website to check that you’re getting a good deal on your next loan.
Make a habit of checking online before you make any purchases, so you can ensure that you’re getting the lowest possible price. The best thing that can happen is you end up with a great deal that saves you a lot of cash. The worst thing that happens is that you waste a minute or so. It’s a no brainer.
3. Set Goals for your Money
If you’re new to budgeting, then you might have two categories for your cash right now – money that pays the bills, and “other” cash. The best way to make your money work for you is to ensure that every penny you earn has a purpose. Start by figuring out how much money you need to put into that “essential payments” category, then split the rest up into “savings” and “fun.”
Although it’s important to concentrate on savings before you start dedicating money to random things that you want, don’t forget to leave some room for fun. If you’re too strict with your budget, you’ll end up not wanting to follow it.
4. Learn How to Talk About Money
Unless you’re the only person responsible for cash in your household, then you shouldn’t be the only person worrying about money. Speak to your partner about your goals and expectations when it comes to cash, and make sure that you’re both on the same page. If the two of you are working together, you’ll find that it’s a lot easier to accomplish your goals.
If you have kids that are old enough to understand the value of money and how you need to spend it, you can also get them involved. Sometimes, children can help you think of saving strategies that you might not have considered yourself.
5. Look for Helpful Tools
If you’re always struggling with your budgeting strategy, why not find some tools that might be able to help you? For instance, there are plenty of budgeting apps available for your smartphone today that can track your expenses for you, and let you know how much progress you’re making towards your goals.
If you don’t’ like the idea of watching the pennies yourself or tracking everything with a pen and a piece of paper, then the right tools can be incredibly useful.
6. Keep Checking in on Your Budget
Finally, remember that your budgetary needs might not stay the same forever. Life changes and your finances will evolve throughout the years. Whenever something happens in your life that might alter your cash situation, remember to look back at your budget and see if anything needs to be altered. For instance, if you get a bonus at work, where are you going to spend that extra money?
If you take on a new expense each month, is there anywhere you can cut costs in other areas, so you’re not missing out on sending cash into your savings account?