Making a resolution to work harder, spend less, and simplify your lifestyle, is very noble. Making the most of the money you are earning, right now, will allow you to do the footwork necessary to live well, thrive, pay off debt, be insured, and have savings.
There are fundamental, yet simple tips and hacks to apply, when making that dreaded budget. Yes, the “B” word, budget, is often misunderstood. It isn’t an easy mental exercise to achieve frugality, but it is the tool which will make managing money an actual, do-able, achievement.
Budgeting Tips – Controlling Cash Chaos
2021 is the perfect year to become intentional about the exact financial goals you must achieve. Itemizing what is earned, calculating monthly expenses, and planning ways to establish a high yield savings account, for emergencies, establishes and overview for prioritizing your cash flow.
Tips for making a workable, sustainable budget, that allows some discretionary spending perks, while building savings, paying debts, and eliminating interest payments, should include:
- Building an emergency fund amounting to 3-6 months of expenses, to prepare for unexpected emergencies.
- Keeping a written budgeting plan on an Excel spread sheet, or a budget app, lets you hook up with your bank account cash flow, to stay motivated and focused on actual expenses, debt reduction, and the growth of your savings account.
- Paying down debts with interest and finance charges, then paying high balance debt, is best. Prioritizing saves money.
- Investing in a 401K, or IRA, as soon as possible, to begin earning interest which compounds, is putting your dollars to work for you.
- Reviewing and updating the budget, when changes in your life add extra dollars, or extra expenses. A quarterly review showcases the positive effects of ending cash chaos, and crushing debt, for super-power status in your own life.
Budgeting Hacks for 2021 – The Journey Starts Here
Handling your finances today can be daunting. Millennials and Gen Zer’s are faced with enormous student loans and other debts. Baby Boomers and Gen Xer’s are striving to save for retirement, while paychecks aren’t keeping pace with the rising costs of health care, housing, and food. Without savvy money management, everyone faces working longer, and faces a big push back on achieving retirement age.
To stretch your money, Consider these Budget Hacks:
- Design expense categories for your budget to include and showcase where the discretionary income goes, not just bills, and savings, but lifestyle. Taking an Uber, drinking mocha lattes, and late-night, online purchasing, add up quickly.
- Check that your car insurance coverage fits your driving lifestyle. Find a provider who will bundling polices to save “big” dollars. Freeway Insurance has rate plans, and perks for drivers, and families that add up to big savings.
- Create a category to track subscriptions, monthly, and annually. You may have competing services that overlap, such as magazines, gym memberships, Amazon Prime and Netflix. Cutting back let’s you save more quickly, and reduces wasteful spending, leaving more to invest for big dream purchases.
- Use cash, not cards for monthly purchases. It is too easy to overspend, and blow the budget, when electronic cards get swiped for eating out, using a Kindle, or other impulse shopping. Use a specific amount of discretionary income, based on budget calculations. When the green is gone, you are done for the month, without jeopardizing the planned money stretch that leads to less stress, more fun.
- Comparison shop the service providers you use, striving to cut expenses, and get the most for the least cost. Internet and phone companies offer perks, often. The utility companies have special savings plans based on usage, that can afford savings that will delight you, and help sustain the planet, simultaneously. Do the research, reap the save.
- Try for a better interest rate on your credit cards. Be persistent and firm with your request, and let them know you are comparison shopping. Track the amount of your payment which is applied to the balance, each month. Credit rates continually change.
- Set up an automatic savings account, and let that deduction happen for you. The savings will grow exponentially, and you won’t miss the hassle of getting to the bank. Increase the amount overtime if possible.
- If money organization is not your strongest attribute, use the 50-20-30 plan that Senator Elizabeth Warren proposed: 50% – necessities, 20% – savings, and 30% to your lifestyle choices. This is a great framework for economical living.
Designing a personal budget, updating, and tweaking it to grow your funds, is a pro-active way to build a sustaining financial life. Your investments and savings will grow. Your health care, insurance needs, future plans and retirement funding, will be attainable. Living will be simpler, and you will thrive, because you did the work, now, in 2021.