You are trying to save money this year. That is a great resolution to have. However, you would not be able to save much if you did not have a working budget. These are 10 budgeting tips to help you save money this year.
Saving money is hard. Sometimes, it always seems like there is a lot more to spend on and just a little less to save. However, it is mostly so because we just do not make budgets that actually work for us. Currently, we are living in times of uncertainty, giving you more reason to master savings and be prepared for whatever.
Before I go in and share with you the 10 budgeting tips, we need to understand something. Budgeting your money is useless if you choose not to commit to it. A budget is a plan, a strategic plan. For you to succeed, you need to work in its perimeters and follow the tactics you lay out. It makes no sense to plan and not to go by it. You would be wasting your precious time and energy.
I know, that is some hard talk. But one we had to it get off the chest.
7 Budgeting Tips That Work
1. Make a Budgeting Goal
Like I said before, a budge it is a strategic plan. Even if it is a personal one, it is still strategic. And like every plan, it needs to have a clear goal. That is, you need to come up with clear goals as to why you are budgeting. Examples of goals would be:
- Save a certain amount of money
- To buy a house or car
- Pay off a debt
and many more. You just have to have a clear goal set that will help you get committed to your budgets.
2. Budget before the Income
The major problem we make is that we often budget after the income arrives. It is important to budget before the month ends. Just before the income arrives. It makes the plan a little more solid.
If you have one job, you know the income expectation of the month. If you also have other side hustles, then make a round-up of the total amount to be hard at the end of the month. From that, come up with a proper budget of how much money will be spent. Consider every expenditure that will need to be done in the upcoming month.
3. Savings first, Expenses Later
When making a budget, it is important that you consider your savings first. From the incomes expectation, make a percentage of how much you want to save. I will still you a quote I have used before
Do not Save what is left after Spending. Spend what is left after Saving!
Budgeting for your expenses should only come after you are take away your savings. That way, you are left assured that there is money stacked away safely. The other way is to see your savings as a prime debt to yourself that needs to be paid off urgently.
4. Separate your Needs from your Wants
Another thing vital when doing budgets is making sure that you know what are your needs and wants. Your needs are essential, while wants are the little luxuries that you enjoy. For example, your needs and wants would be:
Needs: - Rent - Food - Water bill - Electricity - Cloths
Wants: - TV subscription - Phone expenses - Gym subscriptions - Vacation - Eating out
Prioritising the needs is vital. I’m sure we all know why. But if you need to be told, they are things that you cannot live without. While the wants are just your luxuries that you enjoy.
5. Think of the Holidays in advance
It is a great plan to think of future holidays in advance. Events such as Easter, Mother’s and Father’s Day and Christmas are meant to be planned ahead. You are likely to spend a lot of money during these days, so better have a special savings for them. At the same time, it is also important to plan in advance days like birthdays and valentines, even dates. It makes you stick to the spending plan and not to crave for your savings. Everything becomes way better if you budget in advance.
6. You might need a little change
When budgeting, more especially during the time when you are separating your wants and needs, it is important to notice if an adjustment in lifestyle is needed. Sometimes, the lifestyle we lead is what makes us do poorly when it comes to savings. We try so hard to maintain that lifestyle, leading to the squandering of your income. Which means, you not sticking to your budget or not even being able to budget at all.
As you are budgeting, try to adjust a little. If you buy lunch every day at work, change that to getting packed food. After days, if you see that it helps save some cash, it means you have to adjust.
Make sure your entertainment expense is not too hefty. Make it reasonable and doable.
7. Do not forget Yourself
I know, it is weird to tell you to adjust a little and then not to forget yourself. However, you ought to understand that entertainment is an important factor in our lives. Entertainment has a huge effect on our mental health. So, although you are trying to save, please make sure you also factor in fun.
It is important that your budget has an entertainment section. That way, you do not over do it when it comes to spending on fun. Best you budget for those album purchases, alcohol or music shows. Below, I will show you a budgeting template that can help you factor this in.
8. Budgeting for the Unknown
We live in a world filled with uncertainties. More so now when we are battling Covid-19. You need to make sure that you have budgeted for the unknown. Put aside a bit of money that can help you in situations you did not plan for. That way, you are totally caught off-guard.
9. Track your Expenses
It is simple to make a budget, save and then smile through it. Most people do not even bother to go back to it after they are done. This is mostly because of the lack of commitment to it. However, it is important that after the budget is done, your income is in, and savings are stacked away. The final job is to make sure you are keeping a close eye on your expenses.
I love doing what I call the marking method. I write down the things I want to spend on the most within the month. Once I’ve purchased them, I mark them in my notepad, a sign that I am not allowed to buy them again.
For my fellow Malawians, it is important to do this with your internet expenses. Bundles fly out fast and since we live in a digital world, we end up re-purchasing. However, those repurchases are mostly not tracked. Have a limit in your budgeting. A ceiling as to how much you are going to spend on them. Once that target is reached, it means you are no longer allowed to spend on internet.
You have no idea how much money you would be saving by just tracking your expenses. At the same time, it helps you with making adjustments.
10. You will not be perfect
The final budgeting tip is that you will not be perfect. You are only human, and sometimes, you will make mistakes. When you do, do not be too hard on yourself. Just make sure that you pick up the slack and find a better way.
An idea is to take into account what you overspent on in the next month budgeting. That way, you are able to repay. But like I have said, you should be too hard on yourself. Make the mistakes, that way you are able to learn from them.
I found an amazing budgeting planner that should be able to help you with your budgets. It is a template from Apartment DIY, check their website for more.
Make sure you budget and save, it is important for good financial health and muscle. If you have issues with being accountable to your budget, then it is best you find someone to keep you in check. Someone who can help you be on track That can be your partner, parent, sibling or friend.