Top Tricks for Building a Better Budget

by on August 7, 2019

Perhaps the number one rule to financial independence and freedom is this: Always spend less than you earn. However, for many people, this is easier said than done. After all, there are so many bills to think about each month, from food and hygiene essentials to house bills, car expenses, insurance, and even medical costs.

It’s no wonder that so many of us have a hard time finding room in our budget for things like savings and future goals. If you’ve been having a hard time making the most of your budget lately, then the following tricks will help.

1.     Start with a Blank Slate

If the budget you’ve been using up until now just isn’t working for you, it might be time to wipe the page clean and start from fresh. After all, there are plenty of different strategies out there, and not all of them will work for everyone. Instead of telling yourself that you’re the problem, consider the fact that the budget you have right now might not be suitable for your spending and saving style.

Consider starting from scratch, keeping your end goals in mind, and making sure that you give yourselfa chance for the new plan to work before you switch to something new.

2.     Account for Every Penny

We all have a habit of brushing expenses off from time to time because it’s “just a few bucks”. However, those little costs can quickly add up if you continue to ignore them. They can also be an excellent source of extra money that you can put into your savings if you want to reach your goals as quickly as possible. With that in mind, make sure that you’re accounting for every penny that you earn, and everything that you spend, so that you can make the most of your spending plans.

3.     Work on Your Credit

Another great way to set yourself up for success with your finances, is to make sure that you’re doing everything you can to build an excellent credit rating. While credit reports might not seem important when you’re first starting off in life, they can make a huge difference to your future. For instance, the better your credit is, the less you’ll need to pay on interest when you’re paying back your loans. That’s because a good credit rating means that you’re eligible for better deals.

4.     Concentrate on What Matters

The chances are that when you think about the “essentials” for your budget, you think of things like rent, mortgage, food, utilities, and so on. Then you might jump to how much you have left over to spend on fun things – like entertainment and meals with friends. However, it’s essential to make sure that you’re covering everything that you need first. For instance, your savings for the long-term are more important than spending money on extra pizzas each weekend. Make sure you don’t ignore your long-term peace of mind and security.

5.     Split Money into Separate Accounts

Temptation can get the best of all of us sometimes. If you’re saving extra money aside from your pay, but it’s still in your current account at the end of each month, you might be tempted to treat yourself to a few extra drinks at a local bar, or a great meal. However, if you move the money you want to save into a separate savings account, then you’ll be less likely to use it when you’re looking for some extra retail therapy. Sometimes, out of sight does mean out of mind when it comes to managing your money. Try splitting your accounts and see if it makes saving easier.

6.     Give Yourself Some Wiggle Room

Finally, remember that when it comes to budgeting, you do need to be strict with yourself. It’s important to stick to the spending restrictions that you impose so you can reach your financial goals quickly, without getting into debt or other problems. However, everything in moderation is a phrase that applies here too. If your budget so meticulously that you give yourself no wiggle room at all, then you’re going to end up getting stressed and overwhelmed every time you’re a penny off your budget. With that in mind, make sure that you give yourself some extra cash in your budget that you can put towards things like unexpected expenses and fun. Budgeting is important, but it doesn’t have to be the thing that restricts you and stops you from having fun in life. Make sure that you don’t hold yourself back too much.

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