Budgeting Hacks: How to Plan, Save, and Stabilize Your Financial Future
In today’s volatile financial landscape, the adage “save a penny; earn a penny” has renewed relevance. Saving and earning have always been critical components of financial wellness. Now, more than ever, it is a good idea to ensure you have a budgeting and savings plan that can withstand economic turbulence. We dive into some of the most universally acknowledged budgeting hacks and financial tips experts often endorse for saving more and maximizing earnings.
Be Real
The best way to get your financial budget in tip-top shape is to start by being honest. Take a long look at how and where you spend your money. Ask yourself where you think you can save and where you should be more thoughtful about spending. When you set your goals, make sure they are achievable. “One of the biggest mistakes I routinely made when I tried to budget was vowing to spend a certain amount each month that just was not realistic,” Jen Glantz, founder and CEO of Bridesmaid for Hire, says on Insider. “It was always at least 25% less than what I had spent in the months before.” In other words, think of budgeting as a process — you won’t drastically cut your spending or find new sources of income overnight.
Separate Bank Accounts
One effective budgeting hack to help set guardrails is to establish separate bank accounts, which can help you more easily track what income is dedicated to paying bills and what income is used for discretionary spending. Some experts advise calculating your total monthly bills and depositing that amount into a standalone checking account each month. Pay your bills on your credit card, then immediately pay off the balance from the “bills” banking account. This way, you earn those bonus points and never hold a balance.
Organize Your Debt
This budgeting hack comes from certified financial planner Zaneilia Harris, president of Harris & Harris Wealth Management Group in Maryland, who told CNBC that the best way to pay down your debt is to break out what you owe by interest rates, total owed, and associated timelines. Start by paying off the high-interest balances first and work your way through to the more manageable amounts.
Kick the Impulse Buying Habit
From the grocery store to the online shopping cart, we navigate spaces designed to separate us from our wallets. One easy way to cut your spending is to guard against impulse buying. Allison Baggerly on Inspired Budget recommends ordering groceries online to cut out your impulse cravings in the store. Another tip: Check in with someone you trust before making large purchases. To protect yourself against online impulse buying, start by deleting shopping apps from your phone, removing easy one-click payment information from your online accounts, and building a habit of letting items sit in your checkout cart for at least 24 hours before purchasing.
Manage Your Budget Like a Business
You should run your household like the accounting department of any company. Create an annual budget and review it regularly. Experts recommend once a week. During your reviews, see how your actual spending compares to your budget. If there are discrepancies, then adjust your budget if necessary. Be honest with yourself, and make sure you have a firm understanding of where your money goes.
Create an Emergency Fund
As the motto goes, pay yourself first. Your primary goal for savings should be creating an emergency fund, which should amount to at least three-to-six months of your monthly savings. This way, you know that if your financial situation suddenly changes, you’ll have the time you need to get things sorted. Once your emergency fund is created, you can start saving for that next big vacation. Take advantage of tools that can automate this process, carve off a portion of every expense, and send it to a savings or investment account.
Kill Those Unnecessary Expenses
Pack a lunch. Brew an extra cup of coffee and pour it into a travel thermos. Carry a water bottle you can refill throughout the day. Keep some snacks in the car to help ward off gas station impulse buying. You’d be surprised how much you can save by knocking out those $3, $5, and $10 convenience purchases.
Skinny Down Your Subscriptions
Are you watching more Netflix than cable? Do you really need five streaming services? Do you read all those magazines that come in the mail? How many apps on your phone are you paying for that you’re not using? Take stock of your subscriptions and cancel those you don’t need. Many tools and apps are now available to automate this process and even find subscriptions you have completely forgotten.
Cut Those Utility Bills
Hang-drying your clothes is free and can help avoid damage. Smart thermostats work. Baking a cake in the wintertime may warm up your house faster than your heating system. Look for ways to reduce these basic utilities.
Look for Unlikely Income Streams
The internet has made earning extra income more accessible than ever. Do you have unused attic or garage space? Rent it out as storage. Do you only use your car a few times a week? Apps like Turo allow you to rent it out periodically. Your surplus junk or closet full of unworn clothes may find a market online. Take an inventory of your home and determine if there are simple ways to uncover unconventional sources of income.
Give Yourself Play Money
One of the toughest aspects of budget adherence is feeling you must deprive yourself. But smart budgeting doesn’t have to be Spartan. Give yourself some monthly play money to spend however you like. Some smart budgeters do this by taking out a certain amount of cash and storing it in an envelope. Spend the cash however you please, but know that when the envelope is empty, the fun spending is over until next month.
Have a hobby you’ve always wanted to turn into a side hustle? Check out our tips to begin selling your crafts, baked goods, or thrift flips at the farmers market.
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