Ever felt like Luke in Star Wars, “The Empire Strikes Back” when you discovered how much money you’d spent at the end of the month? No, no, that’s not true! That’s impossible! Oh, but it is! We’ve been there too. In fact, the first month following the birth of our son was one of the biggest shell shocks we’ve ever had (outside of a trip to Vegas where we went full bat county).
Budgeting can be hard and the word itself has received a lot of bad press. However, it doesn’t have to be all bad. After all, a budget is basically just a set of directions for where your money is going to be spent. As long as we don’t deviate too far off from the set guidelines, it can be an essential tool in any household. And with these five tips, you can feel a bit more breathing room at the end of the month:
Tip #1: Trim the Fat First
Want to know one of the biggest reasons your budget goes broke before you even blink an eye? Auto payments. In this day and age, we’ve placed so many things on auto-pay that it feels like we’re accountants for those products. Try pulling up your statements from the previous month and searching through it to find what’s being paid without you having to think about it. Then, see how many of those you can go without.
Paying for Netflix, Hulu, Showtime, Lifetime, and many other applications even though you only have one hour of free time per night? Try canceling all but one of them. This way you can binge the shows on one of the platforms while stacking up shows on the others. Once you’ve watched everything on the one or gotten bored of their content, cancel that subscription and start up the next one on the following month. By that time, the other one should have tons of new stuff that you can binge to your heart’s desire.
Tip #2: Guide Your Payments
Payments that have to be made every month can sometimes fluctuate. Your car payment could fall on the fifteenth one month and the seventeenth on the next. This can cause havoc on your budget because it can weigh one month heavier than the next. Rather than accounting for differences from month to month, try calling your recurring providers and attempting to get on a set date for payments that don’t fall on the outskirts of your budget. This will allow your budget to be more consistent.
Tip #3: Tag Team
Have a spouse or a partner that shares your budget? Ever been super mad at them for basically liquidating it in a single swoop when they bought a second video game console they didn’t need? Succeeding in your budget in a shared household can be a challenge. Make sure to bring your partner into the loop with you and make them part of the process. Set a date every month or even every day or week to talk about your finances as a team. Odds are, they’ve just been spending so much because they haven’t truly realized how slim your budget actually is. By becoming a tighter team in the effort to combat overspending, you can ensure that everyone is on the same page.
Tip #4: Stop Comparing
Yes, your co-worker’s new car is awesome. No, you don’t need to buy a new car to keep up with him/her. Competing with people you know for how wealthy you may appear on the outside is an age-old issue. In a world that values looks so much, it’s no wonder that so many of us struggle with it. But this can be a quick way to throw your budget out the window and into the middle of highway traffic.
Try stepping back and taking a good hard look at how other people operate. That same co-worker that bought the new car? He’s $500,000 in debt with only a $30,000 salary to support those crippling payments. You don’t want to be like him. Instead, move to a new playing field. Link up with others you know who also want to exit the rat race and retire early by making smarter decisions with their money. Set up low-cost dates where you can meet up and have fun without having to spend too much. Or try investing in a few items that have long-term money-saving effects such as a set of Frisbee golf discs to take to your nearby park or maybe a deck of cards to hold a friendly piggybank poker night (change only! No cash or cards!).
Tip #5: Budget Party
Just using the word budget in a sentence is enough to make some people cringe. But it doesn’t have to be that way. You can change the way you view your budgeting by setting up a budget party once a month. At the close of your monthly spending, make a nice (budget friendly) dinner, pop open your favorite drink, turn on some groovy tunes, and get into it. Come on! Nobody ever made a rule that reviewing your monthly spending had to be a drag. You can look forward to it and enjoy it. Heck, maybe you can even treat it like a holiday where you celebrate saving.
Easy enough, right? Right! With these five tools, your budget can be used more effectively and be treated with the respect it deserves.
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Until next time,