5 Easy Tips For Useful And Productive Budgeting
Let’s be honest, no one really wants to sit down and budget their life over the course of 12 months because it’s going to takes hours and you may give up half way through. I’m going to make it a lot easier for you to do your budget just by following 5 easy tips.
- Get an App
The chances are, if you need to complete something that is boring or hard, there is an app that will do most of the work for you. This is definitely relevant when budgeting. Just the mere thought of opening your laptop and creating a new spreadsheet to list all of your income and expenses is too much work already. Take advantage of the many brilliant app developers who have done half the work for you. There are some great free budgeting apps like Pocketbook, TrackmySPEND and Expensify which will just about budget for you. Even if you don’t use these apps effectively, it will still show you how much you are spending and make you think twice about that fourth pair of shoes this week.
- Sort out your expenses in Must Haves and Optional
I know what you are thinking, that dress is a “Must Have” not an optional purchase. What you really want to do when you are sorting out your Must Have’s and Optional expenses is put them into their respective lists based on whether you could live with or without this item. The beautiful thing about this list is that you get to choose how many Optional items you want to include in your budget based on how much you are wanting to save. For instance, you may have 50% of your income per month that is allocated to Must Have’s like food and shelter. The remaining 50% is Optional expenses, however if your goal is saving 20% of your income, then you have 30% of Optional expenses you can include in your spending allowance. So go and get that dress or dinner on a Wednesday night and include in your Optional expenses for the month.
- Save money on Food
This is a tricky area. Dining out is actually getting cheaper and cheaper and just saying I’m going to eat dinner at home this week may not have the effect you want. You may end up having to buy so many ingredients for the meals and throwing out half of the food because you didn’t eat it over the two days before it goes bad. This is where planning your food is very important. Make sure you buy enough to make two meals for yourself and take the leftovers to work for lunch the next day. Or freeze the second meal to eat another time. Being smart with your food planning can reduce the amount you spend on food dramatically, but it won’t happen if you are wasting food at home.
- Create a separate bank account
This is a no brainer for me. If I can’t see the money in my account or if its slightly harder for me to access that money, then I won’t be impulse spending. Go into your bank, or better yet open the account online through your internet banking. Yes they do that now! It’s much easier that way, and they will setup an online savings account for you that you will not get an atm card for. This part is very important. Do not link a card to this account, or you will spend it at some stage. The next part is to schedule a regular transfer from your primary account, the one your salary goes into, to your brand new online savings account. Choose the amount based on the Must Have’s and Optional expenses we discussed earlier and make sure it is scheduled for the day after you get paid. This will make sure it comes out before you even see it.
- Give yourself some breathing room
We are not perfect and even the most disciplined person will slip up with spending every now and then. You need to give yourself some room to breathe, if you slip up, don’t give up on the budget. Just reset for the next fortnight or month. You will lose more over 6 months if you give up on your budget at the start than if you slip up two or 3 times. Follow these easy tips and you will be saving for that next holiday before you know it.