There are some people who thrive on creating and sticking to budgets. For everyone else, it can be a seemingly daunting task to face up against your finances. Without a place to start, it might feel like you’re floundering along, making the same mistakes in different forms. This can be the case if you try to put together a budget with only haphazard preparation. It’s important for people trying to sort out their money to consider these six often-ignored budgeting tips.
Turn on Automatic Billing
Every year, consumers pay over $10 billion in late fees on their credit cards. This is just one kind of late penalty that causes people to lose money. One way to combat this is to set up automatic billing for your recurring payments. This will help lower the chances of you being late on a payment. You may want to take some extra time considering this if your checking account gets close to zero at the end of the month. Over-drafting your account can also lead to you having to pay a fee.
Be Honest with Yourself
You ideally want to improve your financial situation by establishing a budget. This can only be accomplished if you are completely honest with yourself. Failing to do this will just result in you wasting your time and energy. What does it mean to be honest with yourself when establishing your budget? First, it involves establishing realistic goals. You’re of course trying to save money. But how much are you trying to save each month? Is that viable based on your ingrained spending habits? Without a dose of reality, you aren’t going to get your desired results out of your budget.
Get a Budgeting App
It might seem obvious. But not nearly enough people are using a budget app to take control of their finances. This can be an extremely useful tool for people who aren’t totally comfortable coming up with their own plan. Organization is one of the biggest issues that tends to hold people back when trying to create a budget. They may be able to do the initial planning; but execution is a whole different story. Automate a lot of the nitty gritty of budgeting through an app. This will afford you more time to think about other things.
Look for Money-Saving Opportunities
Couponing isn’t the only way to save a few bucks. There are ways to save money all around you. Do you tend to buy brand names instead of the generic version? Quit doing that and you can instantly start saving money. This is especially true in the realm of clothing. Certain brands tend to be many times more expensive than comparable, but less desirable, options. You shouldn’t be paying up for clothes if you’re concerned about your budget. Cut out as many brand names as possible and you will give your savings a boost.
The average American throws out about 40 dollars’ worth of food every month. That’s over a dollar every day you’re wasting on something that could be eaten. The simple answer is to not buy more than you can reasonably eat before the food goes bad. If you find yourself consistently throwing out perishables, change your purchasing habits.
Take Debt Seriously
Debt isn’t something to joke about. You can quickly accumulate large financial obligations if you aren’t careful with debt. This can ruin your credit and haunt you for the rest of your life. If you already have debt, you need to seriously consider how to work toward paying it off. The two main methods of debt payment are the “snowball” and “avalanche” methods. With the snowball, you pay off small debts right away. This will in theory create a snowball effect, which will gain steam and help you get rid of the rest of your debt. The other method takes a more clinical approach. The avalanche has you pay off debt with the highest interest first. Doing this will lower the amount of additional money you will have to pay to your lender.
You can’t ignore your budget even if maintaining one isn’t intuitive or easy for you. Following these tips will help you stay on top of your finances.
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