1) Use A Spreadsheet
A basic spreadsheet can make your budgeting life so much easier. With a spreadsheet, you can enter all of your expenses and have your monthly totals automatically calculated. You can then play with numbers and instantly see how it will affect your bottom line. If you are trying to balance a budget or find room for savings, a spreadsheet can help show you the way.
Spreadsheets also help you when it is time to pay bills, especially if times are tight. As you pay your bills, you can mark them off your list and the spreadsheet will tell you how much more money you need.
2) Start A Spending Log
If you are having trouble coming up with a reasonable budget, start a spending log. Carry a small notebook with you at all times and record every purchase that you make. In a few weeks, it will be fairly clear where all of your money is going. This will allow you to accurately budget for things like entertainment, food, gas, etc.
Your spending log will be very useful in budget creation, but it can also do something else for you. It can show you where you are wasting money.
Many times, we do not recognize our minor spending habits as a problem until you see the results in the aggregate. At the end of a week or two, when you are totaling up your purchases, you might be surprised at how much money that daily cup of coffee adds up to.
3) Delete Stored Credit Cards
One of the sneakiest tricks that online shopping sites have implemented is the stored credit card. They claim that it is a convenience for you, but it is really a sales gimmick for them.
If you can make a purchase with just one click, you have very little time to change your mind. On the other hand, if you have to search for a credit card and then enter your number, it gives you a fighting chance to come back to your senses. Delete that credit card information from your account and start seeing your impulse spending decrease.
But what about those credit cards that you have memorized? This can be almost as much of a problem, because it only takes a few seconds to type them out. If you are such an avid online shopper that you have those cards memorized, report your card as lost. That will give you a new number and force you to have to find the physical card to make a purchase.
4) Start Meal Planning
Food costs have increased significantly lately, and you need to find a way to control them. One very effective way to do that is with meal planning.
The concept of meal planning is very simple. Just plan out the meals that you want to make for the week in advance. You can then use this list to make an accurate grocery list, with no more guessing. With an accurate list, you avoid wasting money on food that you do not need and that could potentially spoil before you use it.
5) Audit Your Budget Regularly
Once you have a budget in place, your work is not done. You should periodically review your budget and look for more was to save money.
A good time to do a budget review is when you go to pay your monthly bills. Once a month, review your spending and see if there is a way to make a cut. This could be from reducing an entertainment budget, shopping fora cheaper auto insurance carrier or perhaps getting rid of some apps or streaming services that you rarely use. There is almost always a way to save more money, but you have to look for the opportunities.
6) Put Money In Savings First
You are probably sick of hearing the phrase, pay yourself first, but it is true.
You need to contribute to your savings before you pay your other bills. Then, take the money that is leftover and adjust your bills accordingly. This might mean less spending fun, but saving is the most important thing that you can do to improve your financial picture.
So, just how much should you be saving? 15 percent of your net income is a good place to start. That means if you bring home 4000 dollars, after taxes, you should be saving 600 dollars at a minimum. If this seems excessive, start out slow and build up. Start by saving 100 dollars and then add 50 dollars each month, making budget cuts along the way to find the money.
7) Open An Online Savings
Where you put that savings makes a big difference. Avoid using your regular bank and instead go with an online savings account. Online savings have a number of advantages.
The chief advantage is that it makes the money less accessible. You can still get to it in an emergency, but it will take a full business day to transfer. If you open an account at the same bank where you have checking, transfers are instant and that can cause you to impulse buy.
Another advantage is that you will earn mush more interest with an online account. You are likely only talking dollars a month, but why leave money on the table.
8) Come Up With A Debt Reduction Plan
You can not just count on those credit cards paying themselves off, especially if you are a minimum payment kind of person. You need to have a debt reduction plan. The two most common are the Debt Avalanche and Debt Snowball plans.
With the Debt Avalanche, you make minimum payments except for the card with the highest interest. On this card you pay as much as you can with the goal being to maximize your dollar by attacking the highest interest.
With the Debt Snowball, you again make minimum payments except for the lowest balance card. On this card you pay as much as you can with the goal being to motivate yourself by paying down a card fast.
It does not matter which plan you choose, just have a plan.
9) Plan Some Fun
All work and no play is no way to live and it will eventually come back to haunt you. If your budget is too restrictive, it can seem like a tough diet. Just like with a diet for weight loss, you need a cheat meal.
Set aside a percentage of your income to be used freely. It could be as little as 50 dollars, but it should be something. This will give you a spending outlet so that you can have a little fun without wrecking your finances.
