Budgeting is a process that sounds simple enough on paper: you track all your income and expenses and put aside some money to grow your savings each paycheck. However, many people set themselves up for failure by making unrealistic budgets and failing to cut their spending. There are plenty of easy ways for you to save money that don’t require you to commit to a life of instant noodles. All it takes is a little bit of know-how, patience, and commitment. Here are some actionable tips:
Avoid Credit Cards
When an emergency strikes, it’s easy to whip out the plastic and cover the costs of your car repair or medical bill. While this will get you through an immediate crisis, the high interest rates associated with most credit cards can send you plummeting into debt and throw off your budgeting plans. If you’re in need of urgent cash, research community funds and NFPs that offer low interest and no interest loans for families with low incomes to avoid the credit trap and get out of debt sooner.
There’s An App For That!
One of the primary reasons people ditch their budget is because tracking receipts, expenses and income to the dollar is frankly, pretty dull. Thanks to apps, you no longer need to get out the pen and paper to figure out the nitty-gritty details of your spending. There are dozens of free, useful tools available to automate the mundane calculations for you. Depending on your preference, some connect to your bank accounts and feed all your transactions into the app while others require manual input. You can even use apps to take photos of your receipts for storage, which will be a blessing come tax time. Speaking of tax, there are also excellent digital sources for putting your records together and filing at the end of each tax year. The likes of TaxReturn.com.au will offer plenty of guidance and make what is usually a tedious and time-consuming process go a lot more smoothly.
Find The Best Deal
When’s the last time you checked the interest rate and fees for your spending or savings account? If the answer is “a while ago”, it’s time to review your rates. Building up your savings is much easier when you have an account with a good return on interest and minimal fees. That $5 a month for account maintenance may not seem like much, but it adds up over time! Before committing to a new provider, double check your choice with a savings calculator to make sure the switch will pay off.
Don’t Forget To Treat Yourself
People who go on a strict diet often find themselves caving after a few weeks because their expectations were unrealistic. The same can be said for budgeting. There’s no point in setting a budget with the goal of cutting 80% of your spend –you’ll most likely end up splurging and going over budget anyway. Make sure to factor the expenses that are important to you into your budget by setting an allowance. This enables you to enjoy life’s little luxuries responsibly.
Negotiate With Lenders
Every little bit helps when you’re trying to build up your savings, but it’s examining your recurring expenses that can shave some dollars off your bills. Analyse your home loan, insurance and utility rates and compare these to other providers. Many financial institutions will try and match the price to retain you as a customer, which can lead to significant savings. If your provider won’t budge, it may be time to make the switch to a cheaper option.
Contrary to popular belief, budgeting doesn’t mean depriving yourself of all the things you enjoy – it’s about being smart and strategic with your spending while still living a fulfilling life. Following the tips above will help you on your way to being a certified budget boss in no time!
