Keeping more of your money is not just a dream or wish you have. It is imperative that you make changes to your habits so that you are actually keeping more of your money.
Keeping a household budget can be difficult for some. I have a one-page budget for beginners, download your one-page budgeting sheet here.
Keeping More of Your Money
It is hard to keep track of everything that is going on, and it takes a lot of work to keep up with the budgeting.
However, it also has many benefits! One benefit is being able to keep more money in your pockets by not spending as much as you have been before.
Seeing your numbers head-on will help you stay in check. It can even curb those impulse buys too.
A budget is essential if you want to maintain healthy finances. A simple tool lets me know whether or not I can afford all of my expenses and extras, as well as making sure that there’s enough money left over at the end of each month for things like vacations and investments.
A good way (and often necessary) step towards financial success is developing an effective spending plan, and having a zero-based budget.
You can keep your budget in a hand-written ledger, on an app or spreadsheet. What matters most is that you have one!
What Is a Budget?
A budget is basically just a money plan. It’s the blueprint for how you will distribute your money so that all of it goes to expenses and is not left unspent on unnecessary things, which would give nothing back in return.
A typical month-long budget should suffice as well!
Your spending plan should be a detailed list of how much income you make and an itemized spending breakdown, including descriptions for clarification.
Why Is It Important?
Keeping a budget is important for plenty of reasons. It’ll ensure you have enough money each month to meet all your monthly obligations, and without one it can be easy to overspend before realizing what that could do in the long run!
A budget is like a compass in that it helps you figure out how much money is available for certain purposes. It can be used as an insight into your goals, whether they’re to save up something specific or pay off the debt by allocating funds to each obligation each month.
It helps you understand your spending habits too. We simply spend too much money and usually on all the wrong things or at the wrong times.
Your budget will keep those purchases that can wait in check.
Tips to Get Started
The first thing you need to do when it comes to budgeting is to know how much money you have coming in. Understanding what you have to work with is essential to creating realistic expectations for your spending allocations.
Write down what you made last month as a starting point for your budget.
I use my net income because I have taxes and insurance that come out before I see the money i can actually use.
For many, this is unlikely to change. If your budget does vary month by month and you’re not sure how much it should be for a given time of year or based on information from previous months then estimate what’s average in order to give yourself an idea as far as numbers go before tracking anything else out on paper.
Mine fluctuates depending on if I have overtime or not. So, I base my budgeting on 40 hours and use overtime pay for extras or for saving.
If you’re feeling overwhelmed by the thought of balancing your monthly budget, start with categorizing everything in terms of its respective expense. For example, transportation is typically divided into gas money and car payment; utility bills usually include cable as well electricity/natural gas supply cost (energy).
For me, I find it best if I itemize each individual expense on paper I am better at keeping track of stuff.
Keep it simple at first while you get the hang of your new budget. You can make changes to this basic system over time. You’ll soon discover the benefits of keeping a budget and will be glad you took this time to invest in this positive habit.
- Figure out your net income
- List out all your bills, with due dates
- Add each bill to your bill calendar on its corresponding date
- Fill out each weeks budget in pencil ahead of time
Adjust when needed, that is why I say use a pencil so you can adjust as needed.
You may not have it in you to save money unless an automated process is involved. We all tend to spend what we earn rather than put investments into savings and investment accounts, but with the way, technology has progressed! Automatic transfer can really help your hard-earned coins grow fast–and leave more time for other important things like family or leisure activities
By bypassing the traditional checking account and having some of your paychecks automatically deposited into savings, you can avoid a significant amount in fees.
The best way to get started is by setting up an alert on your calendar. You could start with 1% or 2%, and monitor the amount that you save every day for 30 days before deciding if this new habit became something addicting in which case, keep saving!
Create a mantra
Do you know how sometimes you have a really hard time keeping track of your finances? Well, there is an easy way to fix that, create a mantra. Behavioral economist Dr. Hersh Shefrin has found that creating financial rules can help make us better money managers! So go on- create one for yourself today.
When people invent their own personal beliefs, they have a feeling of guilt if it’s not followed.
I know how it is to have a spending habit that you really wish could change. Maybe it’s the $50 coffee run each week, or maybe there are just too many debts and bills for one person!
I’m sure we can all relate in some way.
Imagine if you could do more than just cut your spending habits. Would that take care of all those debts?
It’s just a matter of time before the bills start piling up and you find yourself at your wits’ end. But don’t worry – there are ways to avoid this.
One way is by creating an anti- Splurge mantra, such as “I only indulge in entertainment after paying off all my credit card debt.” Better yet write it down or pin it on your wall so that when temptation becomes too strong (and let’s admit: we’re human), these words will remind us what needs a priority.
Share your money goals with a trusted friend
Dream of traveling around the world, owning a home, and finally being free from student loans? When our dreams are big we tend not to tell anyone because it is possible that they will fail us. However, this may be one mistake you don’t want to be made!
People who write down their goals, then give a friend weekly updates on their progress, were 33% more successful in accomplishing what they set out to do.
So excited to take things high-tech? Create a shared Google Doc or email chain, then set up an automated calendar reminder in it that emails everyone on Sunday nights with what’s happening next week.
A credit card can feel like freedom to live the life you want, right now—but we all know that without the appropriate cash behind it will be short-lived.
The average American household that has debt carries over $15,000 in credit card balances alone. This is due to them charging more than they can afford today and living with the burden of paying it back later – if ever.
Want to break the credit habit?
The first thing to do is freeze your credit card for two to three months–literally, submerging it in a bowl of water and setting it in the freezer. Then fill up any gaps with debit cards linked together through your bank account so you can keep a careful record of all spending (just make sure not to have overdraft protection).
If you do not have it in the bank, you do not need it.
You deserve more
Ever told yourself “I deserve it” when agonizing over the price of takeout after a long day, or trying to justify a new outfit? We’ve all been there—treating ourselves at the expense of our financial health.
But that’s the old you. The new, improved version of yourself deserves to be safe if a job were lost or debt paid off and savings made for something big–a true source of happiness
When you’re tempted to spend, ask yourself: Do I deserve this $40 candle? or is there something better for me. When money becomes an issue in our lives and we find ourselves asking these types of questions more often than not – it can be a sign that financial security has become a top priority for us as individuals who want their best years ahead!
Make a list
70% of shoppers admitted to making an impulse purchase in the last month—and that more than 70% of those buyers regret it later. Why? A survey from National Endowment for Financial Education found out what seems like common sense: The first thing you should do before ever stepping foot into Target or any other store is creating a plan! That way if your shopping trip leads anywhere except with groceries at home as planned then there won’t be anything lost but the money saved.
Free yourself from impulse buying by creating a master list that you can refer back to. Open in the Notes App on your phone, or create it as an email draft for easy access when shopping at home and driving around town! When an Idea enters the brain get out pen ready because here comes The NPD Group with their study: “72% shoppers never—or only occasionally-impulse buy extra items.”
Bad days happen, how will you react to them?
This is a tough one. You’re trying to save the three to nine months of living expenses that should be in your emergency fund and you meant for getting away from using credit cards, but it slipped up again. First, don’t get discouraged because even science says this won’t set you back if done right!
The best way around these issues? Replace any more you had to take from your emergency fund as soon as possible.
In fact, a study published in the European Journal of Social Psychology shows that for some people it takes weeks or months to hammer home good practices; others don’t need as much time. But no matter how long each individual needed to cement his or her new habits- not one was completely derailed by slip-ups here and there
You’re already on your way to a better financial life. Just one cookie won’t make you fat, but remember that making new habits takes time and mistakes are just opportunities for us to do better tomorrow! So just one slip up won’t hurt, it is how you react by replacing what you took as fast as possible.
Create a buffer
I am not sure if you remember me talking about my own buffer. I add stuff to my cart all week. Then on my buy day, I go through that cart very carefully with a pro and con approach. I take out what i can wait on for the next weeks purchase. This approach helps me determine if we really need that item or not. My buy day is Tuesday, if it is not Tuesday, i am not buying. I allow myself one take-out purchase under $10 and even that is on Tuesday. I also have a spending limit for my buy day. For non-essential things, my limit is $50.
We all know that setting up a savings account is the bare minimum you need. But there’s more than just putting money away for your future self-satisfaction, which may involve some serious planning and strategy on top of simply saving what we can! Personal escrow accounts are perfect if this sounds like something interesting to explore with an experienced financial planner in order to get closer results sooner rather than later
Setting up a personal escrow account is the best way to save for your future goals. Why let all of your money sit stagnant in one place? You’re more likely going be able to make smart decisions about what exactly needs investing if it’s not just sitting there, and when you see how much progress has been made on certain things while others are still lagging behind then maybe we should rethink our plans altogether!
Experts recommend setting up multiple accounts to work on multiple goals (yes, your vacation gets its own account) and establishing automatic contributions.
When you set up an account for each large financial goal, you are less likely to spend that money on other things it is not intended for.
The only way to keep more of your money is by cutting out the unnecessary things that are wasting it. Be proactive about what you spend time on, how much energy goes into those activities, and if they’re worth spending your hard-earned dollars on. Once you start making these decisions with a clear head, then the possibilities are endless! You can never go wrong when living within or below your means – but make sure not to cut back so far as to jeopardize the quality of life.