With various different methods you could utilize and helpful resources you could find online, budgeting is no longer a complicated process, and is likely something you've already done. However, simply creating a suitable budget has never been the biggest issue â€“ sticking to it is. The cost of living continues to rise, the number of expenses we have to take care of is increasing, and the availability of convenient services makes it difficult not to overspend. If you're battling these same problems, here are some simple but effective tips that will help you actually stick to your budget:
Track your regular expenses
When developing a budget, most people focus on larger, unavoidable expenses such as rent, utilities, debt, and similar factors. However, even smaller expenses can end up significantly affecting your budget, from groceries and commuting to monthly shopping sprees. To manage your money more effectively, it's recommended to track all your expenses in greater detail for a couple of months. This will allow you to see where your money is going, how much you're spending in each category, and whether you can find ways to save on certain factors to expand your budget.
Always pay your bills first
As already mentioned, certain large expenses such as mortgage payments and utility bills are inescapable. But if you wait until the end of each month to pay these bills, you might realize that you don't actually have enough funds to cover the costs. This happens due to poor financial planning and management. To prevent this problem from arising, always make sure you pay your important bills first, as soon as the paycheck comes in. You can ask your bank to pay these bills automatically as well, leaving you with a clearer spending budget for the rest of the month.
Save money on groceries
Food can be a large problem area for many people, particularly as prices continue to rise. While reducing the number of times you eat out or order takeout is common advice when you're on a budget, even cooking at home can come with high costs. Fortunately, you might be able to save on groceries as well. Consider planning your meals in advance, and then purchasing items in bulk to reduce food expenses. Solutions such as coupons, loyalty cards, and special discounts can be of great help as well.
Consider car share options
Owning a vehicle can turn out to be quite expensive for many adults. Not only are gas prices continuously rising, but the long-term costs of driving such as maintenance and repairs could quickly burn through your budget as well. As this is a rising issue all across the globe, many countries have managed to find innovative ways of mitigating this problem. For instance, car share in Australia has become an incredibly popular solution. By giving individuals the opportunity to book and drive vehicles using a mobile app, Australians can only choose to drive when they need to, thus saving money on car ownership. You could do the same.
Use a budgeting application
Across the US, however, mobile phones are used in another practical way â€“ for more effective budgeting. There are many good money-management apps on the market, all of which are easy to use and make monthly spending simpler to track. These applications allow you to follow your expenses in real-time, access your budget from anywhere, and check your balance in each category quickly, consequently preventing you from overspending. Some budgeting apps also provide the ability to sync with other people and devices, proving to be beneficial for larger households.
Automate your savings
Having funds in your savings account is absolutely crucial, enabling you to plan for larger expenses, cover emergencies, or simply ensure security on a rainy day. It's generally recommended to put around 20% of your monthly income towards savings to support this process. However, this can be a difficult task for some, especially those prone to overspending and unnecessary expenses. Thankfully, this is another process you can automate by contacting your bank and ensuring a healthy amount of money is entering your savings account each month.
Make smaller daily changes
For those on a tight budget, every opportunity to save can be beneficial. If this is the case with you as well, make an effort to reduce your expenses even further. Contact all your providers and ask for discounts, or simply shop around for better deals if you can't get a reduction in monthly bills. Consider expenses such as underutilized monthly subscription services, and think about putting a spending limit on your credit card. No matter which changes you make, reducing smaller expenses can quickly add up to larger savings in the long run.
Sticking to a monthly budget is never an easy task, especially when facing economic uncertainties. Follow the simple tips mentioned above if you want to manage your money more effectively and accelerate your road to financial stability.