Budgeting isn’t exactly the most exciting thing in the world, but it’s an important part of managing your financial strategy. Without a budget, it’s incredibly difficult to track your spending and make sure that you’re not putting yourself into any tricky situations. The question for most people isn’t whether to budget or not, but how can they create a budget that they can really stick to?
If you’re worried about your financial health, or you simply want more control over your money, the following tips should make it easier to spend less and save more.
1. Use Direct Deposit
The easiest way to manage your spending? Use direct deposit. If your paycheck goes right into your bank account through direct deposit then you know the money is going to be there, ready for when your bills need to come out. This reduces your risk of paying any bills late and incurring a fee.
If you want to simplify your saving strategy even further, you can also speak to your bank account or your employer about sending a portion of your paycheck directly into a retirement or savings account. If you never see a portion of your income in your current account, you’ll be far less likely to spend it on things you don’t really need.
2. Pay Things Automatically
Speaking of making direct deposits. No matter what you do to reduce your monthly costs, there are going to be some expenses that you simply need to pay at the end of each month. These fees might include your mortgage, car insurance, or even your cell phone fees. To ensure that you don’t go over the deadline with any of your payments, set up automatic payments through your bank.
Not only will automatically paying your bills at the same time each month help to protect you from any late fees, but it could also help you to cut costs too. Some providers are willing to offer discounts to people who take advantage of automatic payments.
3. Compare Prices on Loans
Even the most frugal people need a little financial help at times. You might get a loan to help you pay for an upgrade to your home, or you may use a loan to help you buy a new car. No matter what you’re borrowing for, make sure that you choose a financial product that’s best suited to your needs. There are countless different types of loans available to choose from, and each comes with its own unique selection of upsides and downsides.
Comparing the options available on the market ensures that you get a loan tailored to your requirements as a borrower. It also means that you can pick the loan with the best possible interest or APR rate.
4. Track Your Spending
It’s easy to overlook the small once-off expenses that we make on a day-to-day basis. If you’ve budgeted before, you might have ignored the money you spend at vending machines or the cash you pay for a morning newspaper. Unfortunately, even the little things add up in the long-run. The best way to ensure that you’re always on top of things is to track every payment you make – from the dollars you shell out for snacks at work, to the money you spend on lunches with your team.
Some people don’t mind balancing their checkbook with a pen and paper at the end of each week. However, if you’d prefer to take a different approach, there are plenty of apps out there that can track your spending for you instead.
5. Keep Reviewing your Budget
Though most of us feel as though we don’t have the time to sit and watch our money each day, the truth is that a great budget is rarely a set-it-and-forget-it strategy. As your life continues to change, your financial circumstances will transform, meaning that you may have times when you can afford to spend more money and moments when you need to spend a lot less. Put some time in your calendar where you can sit down and look at how you’ve been doing with your spending habits.
Ask yourself whether you’ve fallen off the wagon in any particular area so that you can put extra focus into cutting down in that space during the next month. Remember to take life changes into account too, such as raises in your salary, or new monthly expenses. The more often you review, the more complete your strategy will be.