5 Tips To Keep Your Budget Simple And Functional
Let’s face it. Budgeting is a boring topic–as dry as popcorn on toast. And very few people become giddily excited over crunching numbers and tightening one’s belt. In fact, most of you would rather have your canine teeth yanked out than discuss “fiscal responsibility,” right?
The good news is that once you develop a budget that works for you, you will never have to read another budgeting article again. That perked you up, didn’t it? If you’d give your “eye teeth” to get a grip on this whole budgeting thing once and for all, here are some tips that will make the whole process easy and painless.
“I will never have to read another budgeting article again? This blog rocks!”
1. Yes, Less is More
If you have always thought that the whole “less is more” adage is a bunch of hooey, think again. When it comes to budgets, it is actually true. By using less complicated steps, avoiding complex spreadsheets, and simplifying the budgeting process, you will be more likely to stick with it and enjoy greater financial success.
You do not need a gazillion separate bank accounts. Try one checking account for your operating fund and, perhaps, two savings accounts–one for your short term emergency fund and one for your long-term savings goals.
If you enjoy using accounting software, go for it. But, there is nothing wrong with using the good old-fashioned paper and pen method either. If you are juggling mastering a new computer program whilebecoming accustomed to budgeting, you may be biting off more than you can comfortably chew. Instead, stick to an old-school, tree-spawned ledger.
2. Initiate “Bill Day”
Syncing your bills can prevent you from sinking your budget. If you are guilty of losing track of due dates and accruing hefty late fees, you may want to look into having your bill cycles changed to one specific day. Yes, you could make all of your payments on one day such as the 15th of the month, and rest assured knowing that all of your bills have been taken care of.
“Simple Budget Template: Budgeting Made Easy” warns that missing payments or making them late could lower your credit score, making it harder to get approved for loans and mortgages down the road. Paying all of your bills at once may require you to build up a monetary cushion first, but it will save you a ton of headaches, interest, and late fees in the long run.
3. Swear off Plastic
It’s much more difficult to part with cold hard cash than it is to slide your debit card into a machine. And shopping with Visa can feel like you haven’t spent a cent–until the bill comes in. Yikes.
Financially-savvy people operate in cash only. And, many have no credit cards at all. If you just shrieked and fell to the floor, pick yourself up, dust yourself off, and soldier on. Many people claim that they need a credit card for emergencies, but the truth is that once you’ve developed an emergency fund, you will be in much better shape to handle whatever unexpected expense, job loss, or other life change comes your way. And you won’t have to pay hefty interest rates or late fees to do it, either.
Your credit card–and to a certain extent, your debit card–regularly fool you into spending either money that you don’t have or funds that are ear-marked for something else. Like food. Or savings. Today‘s “Build a Family Budget That Actually Works” recommends conducting all face-to-face transactions using cash as it will force you to become more aware of what you’re spending and increase your likelihood of showing restraint.
Plus, you will be able to pay your existing debts off faster and, by avoiding new debt, you will be able to increase your savings amounts–including your emergency fund.
4. Know Your Goals
It’s impossible to hit a bull’s eye if you can’t see the target. And, you will never achieve your goals if you don’t identify them. The whole point of operating within a budget is to achieve your financial goals. Yes, it’s all about you and what you want to accomplish.
What are your goals? Do you want to become debt-free? Are you hoping to retire early? Are you saving for a home? Perhaps, you want to circumvent the globe. No matter what you hope to achieve, it will require making sacrifices. By focusing on the prize, you may find that you are not only more motivated to develop a budget and stick to it, but you may also discover that by making some cut-backs in your spending habits, you will be able to achieve your goals more quickly.
According to U.S. News‘ “7 Simple Ways to Stay on Budget,” confiding in a friend, family member, or financial advisor about your financial goals, and setting up a plan so said individual or individuals hold you accountable, will increase your level of commitment and help you overcome difficulties that you experience.
And, remember, savings is not something you do after you pay your bills. You always pay your savings account first.
5. Do You “Need” It?
Many people have difficulty separating “needs” from “wants.” When you find yourself drooling over a new pair of shoes or the hottest gaming console, ask yourself if the item is something that you actually “need.” If you would like to get a deeper understanding of “needs vs. wants,” “Taking a Deeper Look at Wants VS. Needs” offers real-life examples of both.
See. Budgeting isn’t scary, monotonous, or “something to be avoided like the plague.” By using your common sense, becoming goal-focused, and paying attention to how you spend your hard-earned cash, you can stick to your budget and make your future dreams a reality. So, hold on to those eye teeth. You don’t want the dental bill, anyway.
If you’d like to learn more about establishing a sizeable nest egg, check out “5 Important Things to Remember When Trying to Save Money.”
Kimberley Laws is a freelance writer, avid blogger, and former Personal Banking Accounts Manager. You can follow her at The Embiggens Project.