Budgeting is an important part of any successful business plan. You can’t afford to spend money on items or services you don’t need — that’s a firm rule of the road, and most people adhere to it. This article has all the tips and tricks you need to get your finances in order and help you save money every day.
Have you recently taken on the task of managing money or perhaps making some changes to your money habits? If so, you’re in the right place. In this article, I’ll introduce you to 10 easy steps that will help you save money. These steps may seem small or silly at first, but they’re all things we can do everyday. They’ll inevitably become habits if kept up over time.
Budgeting is a skill every adult should have. This isn’t a finance degree from the school of hard knocks, I promise you that. It’s basic financial awareness and the ability to invest your money wisely that can turn your finances around. That’s why we’re going to take you through a specific process to help you get started budgeting like a pro today.
10 ways to save money
How much do you spend each month? How are you saving for things like retirement and college for your kids? Do you even have time to save money? If not, soon will be a no. Save your time and money by making these 5 easy changes to help you budget better.
Budgeting is probably the single most important habit you can develop to improve your financial health. When done right, it will greatly reduce stress and allow you to have more money at the end of each month because you aren’t living paycheck to paycheck. However, budgeting can be a challenge for many people who find it difficult to stick to a budget without fail or even convincing their spendthrift friends that they’re not constantly blowing through their money (or having a hard time staying within their desired spending limits).
Frugality and budgeting have become buzzwords over the past couple of years. Bloggers, teachers, accountants and coaches are telling us to save money in every way possible. It’s not unusual for older people who have saved up their whole lives to blow through savings because they decided to take the whole summer off, or buy a boat instead of saving more towards retirement.
5 Easy Changes To Help You Budget Better.
Everyone has goals and dreams that they’re saving for. Perhaps you’d like to own property one day. Maybe you’d like to save enough to send your child to college or pay off your own student loans. Perhaps you’d simply like to clear your credit card debts.
Whatever your financial goals, you need to have a solid plan in place. Remember that once you do the work of setting well-defined, incremental, achievable goals, you’ve already made serious progress.
Below, we lay out 5 key points on our all-star personal budgeting plan. Stick to these, and you’ll be well on your way to personal financial success.
- Track Your Spending
This rule is first on our list for a reason. It can be very difficult to successfully monitor your own spending without a little help. Apps such as YNAB (You Need a Budget) are extremely helpful with this. They not only track what you spend your money on, but based on preset budgeting limits, they will warn you when you’re close to hitting those limits.
- Pay Debts in the Right Order
Debt comes in different shapes and sizes. Often, we have large, long-term low interest debt, such as car payments and student loans, and then we have short-term, high-interest debt such as from credit cards or payday loans. The key here is not to fixate on the large debts because the interest rate is low — it’s designed to be paid off over time.
Instead, pay off the smaller, high-interest debts first. Many people think that small amounts can be ignored and easily paid off the following month, but this is wrong-headed thinking. Paying down or paying off your short-term loans each month to avoid the high interest means you’ll be breaking bad money habits and saving more money.
- Save Using the 50/30/20 Rule
This rule was made popular by Senator Elizabeth Warren and it has helped a great number of people save for the future. The rule states that 50% of your after-tax income should go toward necessities such as your rent or mortgage, your utilities and fuel costs, and your grocery bills. Estimate your tax refund each year using a tax calculator and plan to add that amount to savings or investments each year.
30% can be saved for entertainment and luxury items that you might want, but certainly don’t need, and 20% should go toward your savings and investments. This is a great tool that helps you save without depriving yourself.
- Use the Envelope Method
If you have bad credit card control, this tip might be the one for you. Above, we said that 30% of your after-tax income can go to luxury items and entertainment — but for some, finding the self-control to limit spending to that benchmark can be tough.
Consider setting aside the cash in an envelope and never using your credit card. When the envelope runs out, you know you’re at your limit for the month.
- Reward Your Progress
This one might seem counter-intuitive, but the key to long-term success is rewarding progress. As you successfully begin to save and plan based on the tips above, do something for yourself every time you hit a monthly milestone.
It doesn’t even have to cost much — even a small gift to remind yourself that you’re on the right track can be a great ego booster.
And there you have it. If you’ve had the desire to take control of your spending and saving habits, but didn’t know where to start, now you can get on the path of personal financial success with these 5 tips. You’ll be a budgeting pro in no time at all.
