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Have you ever wondered where all your money goes? Do you reach month end and dread looking at your bank account because you fear that you might have overdrawn your account? Do you wish to save instead of spending all the money? Well, one of the best methods that can help you get hold of your finances and improve your situation are these budget hacks.
Unfortunately, sticking to a budget can be one of the most challenging things. From a lack of time to sit down and budget to not coming up with a budget that is easy to use, this task can be challenging.
Just like other things worth doing, budgeting requires a lot of effort. For instance, in the first few months, you are still getting organized, getting used to the idea of budgeting and adjusting yourself to any potential life change. Although everyone has different financial needs, anyone can come up with a simple system that can help them avoid purchasing what they don’t need. But why should you budget?
8 reasons why you need to budget
Budgeting might seem daunting , but it’s actually a really important part of financial planning. A budget can help you make sure you’re spending your money in a way that aligns with your goals and values. Here are eight reasons why you should make a budget:
- To save money
- To pay off debt
- To make sure you’re spending money on the things that matter to you
- To avoid financial stress
- To sleep better at night
- To plan for big purchases
- To retire comfortably
- To give you peace of mind
Making a budget can seem like a daunting task, but it’s worth it for all of the above reasons. If you’re not sure where to start, there are plenty of resources available to help you get started. And once you get into the habit of budgeting, it’ll become second nature. So don’t wait – start budgeting today!
Why Budgeting Works!
With a budget you can keep an eye on the prize- A budget can help you outline your long term goals and start working towards them. By forcing you to save money, map out your goals and keep track of your progress, you can easily make your dream reality.
A budget prevents you from spending what you don’t have- Although many people tend to spend what they don’t have, if you stick to your budget, you’ll never find yourself in this unfortunate situation.
A budget helps you to plan for your retirement- Just like spending money well, it’s also essential to save for your retirement. Thankfully, these killer budget hacks can help you do that.
With a budget you can prepare yourself for any emergency- Life surprises such as becoming sick, being injured or going through a divorce can leave you in a very serious financial turmoil. Since your budget will include an emergency fund, the extra money that you save will ensure that you don’t go into debt during an emergency.
It pinpoints some bad spending habits- Creating a budget forces you to have a keen look at your spending habits. By doing this, you may realize that you are using money on some of the things that you don’t even need.
Some of the most shocking statistics
- Almost 57% of Americans do not budget.
- Less than 50% of households have less than one month’s salary set aside for an emergency.
- Nearly 42% of Americans do not save money for retirement, and even those who save only one in 10 set aside 15% of their total income.
- The average American has a monthly average mortgage payment of more than $1000.
With these statistics, the only solution that we have is to budget well so that we can save money. Here are the top 10 budgeting hacks that you should know.
10 Budgeting Hacks
Set up a waiting rule for luxury purchases
When it comes to big purchases, almost everyone knows the kind of regrets they can have the next day. To move from impulse buying to real needs, you need to get into a habit of writing down everything you want to buy on a daily or weekly basis.
You can start practicing the 100 dollar rule where you force yourself to wait for one day for every $100 that you plan to spend on something.
Although you would not use it for essential things such as appliances, homes, and cars, it will show you how sometimes we waste money on things that we don’t need.
Make a budget every month
Every month comes with new circumstances and expenses that make a budget crucial. It’s, therefore, critical to make a new budget every month. Although you can use the previous budget as a template, your budget needs to reflect the new month if you want it to help you.
For instance, your December expenses may look completely different from those of January. You need to plan ahead for expenses that change and fit them into your budget. Find some creative ways to save money on a tight budget if you need inspiration.
Include all your debt obligations in your budget
When creating a budget, you may be tempted to omit debts. Unfortunately, avoiding your obligations will not make them disappear. So, collect all the information about your debts including the total principal, minimum payments, total interests and loan terms of each debt.
Once you are aware of your total debt make sure you include a monthly payment plan in your budget. More so, if your credit card has high interests, you can contact the providers and negotiate better rates.
Cut your utility bills
Reducing your monthly utility bills will significantly help you to stay on budget. If you are struggling with different types of monthly bills, cutting down on some of them can give you a huge relief.
For instance, shopping for a new internet provider or cell phone pan can significantly help you to save. These step will not only free up more cash for you but will ensure that you stick to your budget.
Save on food by cooking at home
For many households, the biggest issue when it comes to saving is the cost of food. Although fast foods are very convenient, if you think about all the cash you can save when you prepare your food, you realize that cooking is much better.
Since saving on food can be a bit hard, if you have a menu planning hack, you will save a lot on things such as grocery. Through this hack, you can stop eating out and ensure that you don’t waste any food that you buy.
Review your accounts daily
Have you been in a situation where you have to buy something only to realize that you don’t have any money? If you are not keen, the lack of funds in your account can greatly affect you. Instead of spending money without any knowledge, it’s imperative to check your accounts daily.
A quick look at your cell phone’s banking app can help you keep track of all the cash you have for daily expenses.
Live a simple life
Do you remember your school days? When you were in college you appreciated very simple meals. Right? Maybe this was because you were still poor. However, the fact is, you were living a simple life and managing it. If you strive to manage your expectations and live a simple life, budgeting can really be a breeze.
To give an example, you won’t feel obligated to say yes anytime you are invited for drinks. If you’ve already decided to live a simple life, you can start by taking small steps. Before long you’ll be surprised at how fast you find happiness in small things. By making a small change every week, you’ll easily scale back your lifestyle.
Pay savings first
While most people tend to spend all their paycheck before the next payday, this should not be the case. As part of your budgeting, you need to take 10% or even more of your salary and put it into savings.
By doing so, you will avoid the temptations of spending that money later. As a matter of fact, most employers have a system that helps you to direct part of your paycheck into different savings accounts. This means you don’t have to do it alone.
Although budgeting is not easy, it will keep you on the track to take back your money and life. At first, the process may feel restrictive but remember you are the driver. By practicing these simple budget hacks, you’ll be on your way towards achieving your financial goals within no time.