Let’s face it: Some of us are better at budgeting than others. While some people never seem to have enough money, others are plagued with poor or reckless spending habits.
In either case, effective budgeting can help you gain some financial traction and ramp up your savings account for the future.
Let’s check out eight budgeting tips that will help ramp up your savings!
Create a Budget to Begin With
This seems like a no-brainer, but you’d be surprised how many people don’t even make a budget, to begin with. It doesn’t matter if you plan this weekly, monthly, or even daily; the key is that you establish a consistent budget and stick with it.
Not only will this lead to more money in your savings account, but it will also help you maintain some peace of mind. By starting a budget, you will be able to track your expenses to see where you can cut costs to save more money!
Avoid Spontaneous Purchases
Impulse buys and unplanned purchases can be real budget killers. Simply put, if it isn’t already a part of your budget, don’t buy it.
Exceptions can be made for emergencies, but extraneous items and spur-of-the-moment purchases will only hamper your ability to build a solid savings account.
Many people feel as if they need or really want an item, but it’s really just clever marketing tactics that play on your emotions that make you feel this way.
In reality, impulse purchases won’t make you any happier, they may bring you temporary joy, but this usually fades quickly, leaving a dent in your bank account.
You could use the 72-hour rule, which is a strategy to curb impulsive spending. It works by waiting for 72-hours before making a purchase that you don’t need.
This works by letting your emotional actions fade and letting rational thinking take over. After 72-hours, in most cases, you will not even want to purchase the item any longer.
Focus on the Three Most Costly Expenses
While it’s definitely beneficial to look at the smaller costs in your day-to-day life to cut costs, it is much more impactful to focus on the three largest expenses most Americans have.
These are housing (including utilities), transportation, and food.
For most Americans, these are the three most costly areas in their finances, and you should really look closely at how much you spend in these three areas.
Maybe you can move to a more affordable house/apartment, get a cheaper car, eat out less, etc.
The actions you take depend entirely on your current situation, but the key is to focus primarily on what is costing you the most.
One thing that might help is to take advantage of automation to help you on your personal finance journey.
Firstly, you should set up automatic deposits into your savings account each month for whatever amount you can afford.
Secondly, it’s recommended to set up automatic bill payments. So, you don’t have to stress about due dates.
Most credit cards and utility providers offer an automated or recurring payment option for their regular customers.
These systems ensure that the utility companies receive their money on time, but they can also be advantageous to those trying to save money in the long term.
Not only are these platforms convenient for everyone involved, but they can help you avoid late charges and even improve your credit score over time.
Use Cash If You Are in Debt
If you are in debt, then nothing is worse than digging yourself a deeper hole that will take forever to get out of.
It’s recommended to use cash for your purchases if you are in debt and struggling to get out of it.
Credit cards can be great tools when used correctly and intelligently. Unfortunately, they can also lead to overspending and, in some cases, massive debt.
If you find yourself in this situation, or even if you’re just looking to save a little bit of money, try making the transition back to cash.
In this case, your spending is over once your wallet’s empty; it really is that cut and dry.
Buy Non-Perishables in Bulk
A really neat way to save money without really noticing is to purchase non-perishable items in bulk when they are on sale.
Items such as toothpaste, soap, toilet paper, etc… won’t go bad, and if you can afford to purchase more when they are on sale, you can save a lot of money down the road!
Bulk stores, including large warehouse chains, can be a great solution when trying to save money on everyday goods.
Yes, you are spending more money upfront, but you won’t have to re-purchase the items for a long time, and since you are getting them on sale, it is more cost-effective.
Separate Wants from Needs
This is a huge one and has a significant impact on your budget!
You need to separate your wants from your needs, it sounds straightforward, but many people struggle with this.
Many people classify their wants as things they need, but it can’t be further from reality.
So, simply track all your expenses, categorize them into wants and needs, and start cutting costs in the wants category.
This is one of the best budgeting tips to help you ramp up your savings!
Spend More Time at Home
Consumers spend a lot of money going out to eat, frequenting local bars, and visiting friends.
To help save some money, many are now spending more time at home.
Inviting your friends or family over for cocktails and dinner is far more affordable than visiting a fine restaurant, and you can still achieve that feeling of connectedness from hanging out with peers.
If you are trying to save more money, this is one of the best budgeting tips to help you get there.
Developing a budget might be easy for some but might be a daunting and challenging task for others, but with these budgeting tips, you will be sure to ramp up your savings.
Simply track your expenses and work to cut costs. The most important thing is that you start!
Start a budget as soon as possible; it doesn’t have to be perfect; adjustments can always be made.