If you’re always strapped for cash, and it seems as though you never have any extra money to put into your emergency savings, then it might be time to change your financial strategy. Often, there’s a lot more to budgeting than most people think.
If you want to make the most of your finances, you don’t just need to slash your spending or force yourself to try harder at work. You also need to put systems in place that make it easier for you to stick to your budget and avoid over-spending. Here’s how you can work with yourself on your budget, rather than fighting against yourself.
1. Be realistic with yourself
The first step in developing an effective budget is being realistic with the way that you’re going to spend and save. You can’t just tell yourself that you have to spend every penny you earn each month. Aside from the bills that you need to pay each month, there will also be extra unexpected expenses to deal with sometimes too. Having a little wiggle room in your budget will stop you from panicking every time you encounter a surprise.
Additionally, it’s worth having a bit of money in your budget that you can use for fun too. This will stop you from falling off the wagon and giving up on your savings strategy entirely. Don’t try to force yourself to make too many changes too fast, be honest with what you can reasonably accomplish.
2. Automate what you can
If one of your biggest problems with money is that you forget to pay your bills on time, or constantly miss your deadlines for your loan repayments, then make life easier for yourself by automating. Set up direct debits and other strategies that send money from your income directly to the people that you need to pay each month.
Arranging for the money you need to spend on loans and other bills to come out of your account as soon as you get paid will also reduce your chances of accidentally spending the cash that you owe elsewhere when you decide to treat yourself. Sites such as Omacl.co.uk offer easy (and flexible) repayment schemes which you can use to work around your budget. Fully automated.
3. Look for easy wins
Rather than immediately trying to save some money by cutting the things that you enjoy out of your life, look for easy ways to save cash instead. For instance, before you tell yourself that you can’t afford to put any money into your entertainment budget this month, ask yourself whether you can cut costs by negotiating with your utility provider or car insurance company for a better deal.
If you can’t get a better price from the companies that you’re already signed up with, look online to see whether switching to a different provider will help. Sometimes, the best deals really are reserved for new customers. Don’t forget to unsubscribe from any service that you no longer need or want too. It’s all too easy for us to forget to unsubscribe from the things that we’ve signed up for.
4. Make small lifestyle changes
Once you’re ready to start making significant changes to your life, do it one step at a time. For instance, one month, you could focus on setting up strategies that will help you to improve your credit rating in the long-term. For example, you could sign up for the electoral roll, or start paying more off your loans. The next month you can start preparing your meals in advance and creating lists of food you need every time you go shopping at the supermarket.
Making lifestyle changes slowly will help to improve your chances of being able to stick to them in the long-term. If you try to change too much too fast, then you’re more likely to end up feeling overwhelmed.
5. Find ways to make extra money
Finally, if simply looking for ways to save additional money isn’t helping you to move quickly enough towards your goals, try and find other ways that you can make some extra cash. For instance, maybe you could rent out a spare room in your house when you’re on vacation or think about freelancing in your spare time to make some additional money.
You could even consider asking at your job to see whether there are any additional hours you can sign up for. The more money you make, the more you have to save away for your long-term goals. Even merely selling the items around your house that you no longer want or need could give you an extra dose of cash to add to your savings account.