10 Ways To Stay On Track
Anybody can learn to stay on budget if they follow these simple tips. Take a look.
1) Use Cash
These days paying with plastic is the norm. Nobody carries cash anymore, but if you are having trouble staying on budget, maybe you should. Paying with cash can help you in two major ways.
First, it allows you to set a strict budget that you can not break. For example, if you have 200 dollars spending money for a week, you withdraw that much money on Monday. Unlike plastic, when the money is gone, the money will be gone. So if you have spent it all by Thursday, that is just too bad. Having a real consequence like this will do wonders for helping you manage your spending.
Next is the fact that we are more emotionally tied to money. It is far easier to buy something on your debit card than it is with cash. Handing over the actual bills helps you realize what you are really giving up.
2) Work With Your Partner
If you are in a relationship, you need to be on the same page with your partner, even if you are not married or sharing finances.
If one person in a relationship wants to save while another just wants to spend, there will be trouble staying on budget. Sit down and discuss your financial goals with your partner and reach a common ground. From time to time, at least once a month, check back and make sure that both of you are still on the same page.
3) Eliminate Your Vices
We all have our vices and they all cost us money. If you are struggling to stay on budget, perhaps it is time to start giving some of them up.
If you smoke or drink, for example, you know how expensive these activities are. Giving them up, or at least reducing their use can save you quite a bit of money and help you stay on track. In addition, you might just improve your health.
There are of course other vices besides the two above and they can be just as costly. It could be the mid day candy bar, a daily cup of gourmet coffee or a scratch off ticket from the corner store. These are tiny things that add up big in the aggregate.
4) Make Savings A Priority
Much of the goal of budgeting is to make room for saving. Saving money is the only way to build long term wealth and reach long term financial goals.
Determine how much you want to save and then have this amount automatically transferred into savings on payday. Even better, have your payroll department transfer this portion of your check directly into your savings.
Ideally, you should be saving 10 percent of your take home pay. Net $5000, you need $500 to be going into savings. If you are new to savings, this can be difficult but you can get there. Start with an amount that you can afford to save and then gradually increase it over time.
5)Track Your Money
If you are having trouble staying on budget, you need to find out where your money is going. It is easy to get off track if you are not used to budgeting and you might be surprised at just how much little expenditures can add up.
Start a spending journal and write down everything that you buy for a month. At the end of the month, do the math and see where your money is going. The results might surprise you. Buying fast food every day? That could be $200 in cash a month. Get a daily frappuccino?That could be an extra $100. These little expenses add up big over the long term.
6) Pay Off High Interest Debt
If you are carrying credit card debt, you are wasting hundreds of dollars each year in interest. This is money that could be put to far better use in other areas of your budget.
The best way to pay off credit cards is to use a credit card debt reduction method that appeals to you. This could be paying off the smallest cards for immediate gratification or paying off the highest interest cards first to maximize your money.
7) Add Some Emergency Money
One reason that you might be having trouble staying on budget is that you might be too rigid. Life does not always go as you plan it and you need to have a little flexibility in that budget.
Set a little money aside each month for flex spending. This can help you cover those extra little surprise expenses that could otherwise wreck your budget.
8) Move Your Savings
It is very convenient having a savings account at the same bank as your checking account. In fact, it may be too convenient.
Move your savings account to an online account. This will make your money accessible in an emergency, but unavailable for instant transfers. It usually takes a full business day for a transfer to happen with an online savings. That can help you avoid those impulse purchases.
As a side benefit, you also usually get much higher interest with an online savings. It could easily be 10 times the rate that your local bank is paying.
9) Audit Your Budget
Budgets can easily get out of hand if you do not stay on top of them. It is easy to add an expense or just accept a price increase on a service that you are used to having. This is why you should audit your budget every few months, looking for ways to save.
Savings can come in a number of ways from brown bagging it at work to shopping for cheaper car insurance. Every expense is fair game during a budget audit, so you should look for ways to save in every category.
10) Keep An Eye On Your Balance
Do you know how much money you really have in your checking account? How many checks or debits do you have outstanding? Keeping an eye on your balance can help you avoid insufficient fund charges and it can help you recognize unhealthy spending habits.
The easiest way to do this is to simply set up a spreadsheet for your account balance. Every computer comes with a simple spreadsheet program and using it is a great way to keep track of balances. Once you have it set up, you can easily just plug in your expenditures and it will keep a running balance.