Budgeting Hacks to Make Anyone Financially Savvy
Many dreams have a price tag. Buying your first house, starting a family, or even planning a mini-vacation requires some money in the bank. While budgeting might sound constraining, it’s a helpful tool to bring you one step closer to your goals.
It can be challenging for those new to budgeting to know where to start. The following tips are simple to implement but can significantly impact your bank account.
1. Use a Debit Card
Most people already have a debit card. It’s such a standard wallet item that it’s easy to overlook. However, intelligent debit card use can help you manage your money better. Unlike credit cards, a debit card only allows you to spend money you already have. You’ll often pay an overdraft fee if you try to overspend, but that’s far cheaper long-term than credit card interest.
Many people recommend using cash to save money. However, it’s hard to keep tabs on where that cash is going. Furthermore, debit cards can make it easy to track your spending. Each transaction you make is documented in your online bank account when you use a debit card. This makes it easier to see areas of your life where you may be overspending.
2. Download a Budgeting App
Developing and following a budget can feel overwhelming. Beyond creating the budget itself, you need to document each purchase and where you made it. Budgeting apps can save you time and mental space by tracking and categorizing purchases.
Each time you use a linked account, your budgeting app notes the purchase and puts it in the relevant category. Rather than logging into your bank account, open your app to check your spending on housing, food, utilities, etc. This can help you get a clear picture of where your money is going. Additionally, budgeting apps let you create savings goals, making it easier to save for planned splurges.
3. Have Monthly Money Meetings
If you and your partner share finances, it’s essential that you both be on the same page with your savings goals. Setting aside time for budget meetings allows couples to check in on their spending together. It’s also an excellent opportunity to look ahead and discuss any upcoming purchases that need to be made.
These meetings don’t have to be all numbers and seriousness. Treat them as a chance to discuss progress toward shared dreams. Eating at home more and shopping less might not be fun. However, knowing the money you’re saving is going toward a trip can give you something to look forward to.
4. Consider a Capsule Wardrobe
Do you buy new clothes each season only to hate them a year later? Today, we purchase five times as many clothes as 40 years ago. Yet we stand in our overflowing closets, struggling to find something to wear. What if there were a way only to wear clothes you love and save money? Enter the capsule wardrobe.
A capsule wardrobe is a small selection of high-quality garments designed to create multiple outfits. By using this dressing style, you no longer need to shop for new trendy items each season. This not only simplifies your life but prevents you from squandering money on fast fashion that will soon go out of style.
5. Stick to a Meal Plan
It’s easy to overspend on food, from impromptu dinners to loading up on groceries you never seem to use. However, with a bit of effort, you can create a meal plan that satisfies both your taste buds and your budget.
Meal planning is deciding what you’ll eat for each week’s meal before you buy food. This keeps ingredients from going bad, thus wasting money. It also helps prevent unplanned trips to the drive-through since you know there’s food at home. Before you create your meal plan, it’s helpful to see what ingredients you already have in the pantry and fridge. Make an effort to use the food you have on hand before going out and buying more.
6. Keep a Splurge Fund
When people think about budgeting, they often assume that all indulgent purchases need to fall by the wayside. That isn’t the case. You can still get the occasional morning latte or those new shoes you’ve been eyeballing. The key is to set up a separate “splurge” fund.
A splurge fund is a money you set aside for items you don’t necessarily need but want. This allows you to feel like you’re not restricting yourself while setting up barriers that prevent overspending. Before setting aside your fun money, though, ensure your monthly expenses are covered, and your savings goals are met.
7. Learn How to Say No
Budgeting doesn’t mean you can never say yes to yourself. It does, however, mean that you need to indulge with intention. Giving the thumbs up to every Friday happy hour and weekend brunch can quickly drain your bank account. It’s not easy to turn down friends, coworkers, or family, but sometimes it’s necessary when you’re trying to save.
Explain your savings goals rather than feeling pressured to drop $100 on dinner and drinks. More often than not, your friends will be just as happy hanging out as grabbing $16 Negronis at the hot new cocktail spot. You may discover that downing beers on your porch are more enjoyable than yelling in a crowded bar.
Saving money doesn’t need to feel overwhelming. Implementing the above hacks will keep more money in the bank, bringing you closer to your financial goals.