Money is definitely the root of … a lot of stress. Managing your funds and staying on top of personal budgeting can feel like a juggling act. It doesn’t matter whether you’ve been responsible for your money for years or if you’re just starting out.
Even if your system seems to work well for you, a few tweaks here and there could make it better. Who will say no to having more money in their pocket and a bit more financial stability? Give these strategies below a try. Over the next few months, you could start to build a more enormous nest egg.
Maybe you haven’t been the most attentive money manager in the past. Have a few due dates slipped through your fingers? It’s easy to do, and you’re certainly not alone. It only takes a couple of missed payments to ding your credit score.
If your score falls too low, banks and credit card companies will be less likely to approve you. That can be frustrating — sometimes plastic really does come in handy. Don’t stress, though. You have another option.
A secured credit card is a great way to rebuild your credit without asking a bank to heavily invest in you. A funds transfer determines your spending limit, then a secured card works like a regular one. Credit bureaus get reports about your on-time payments, and you watch your credit score climb.
Maybe you heard your parents or grandparents griping about their monthly budget in your younger years. Despite their complaints, budgeting is effective. Sit down and create budgets for the month and the year. It’s the easiest way to keep track of where your money goes.
Earmarking your money helps you keep tabs on your spending habits. Staying true to your plan means you’re less likely to make those impulse buys. Plus, you’re less likely to run out of funds every month.
Do you have a big bill you’ve been staring at for a while? A lingering student loan or a credit card balance that crept up too high? It can feel like having a ball and chain strapped around your ankle. Now’s the time to start making a dent in that debt.
Making smaller monthly payments might feel more manageable, but minimum amounts ultimately cost you more. The longer you take to pay off your balances, the more money you pay in interest. That’s just extra money for your lender.
Shorten the cycle by setting up a payment schedule. Instead of one monthly payment, make two if you can afford it. That way, you’re paying a bit more than what you must. A debt calculator is an excellent tool for helping you set up a schedule.
All monthly expenses are not created equal. Like everything else, you can divide them between “wants” and “needs.” Going out to eat or attending a concert falls into the “want” bucket. Your utilities, groceries, rent/mortgage, and transportation fit the “needs” bracket. Taking care of those expenses is your first priority.
When you’re drawing up your budget, list those costs first. Your monthly housing payment stays the same, so no surprises there. Average a few months of utility bills to know how much to set aside. Be objective about your expenditures on groceries and in restaurants. Set aside a little more than you anticipate; gas prices can be unpredictable.
It might seem old-fashioned, but using more cash can help you stay true to your budget. It’s a great way to ensure you’re still doing fun things — movies and dinners out — without breaking the bank. It might be more complex, with many places going cashless in the pandemic. Pay with paper bills when possible, though.
At the first of the month, put a set amount of cash in an envelope. Consider it your “fun cash folder.” Use it for entertainment and other extras. Spend it carefully; it’s time to cut back for the month when it’s empty. Learn to space out your play nights, and you’ll have the funds for something social every week.
If the idea of committing to a budget has you breaking out in cold sweat, relax. Just know there are times when everything could change. In fact, some shifting will probably happen — and you can’t control it. Your salary could take a dip, or utility rates could climb. Life throws curveballs, and you must be able to roll with it.
It may seem challenging at first, but there are plenty of ways to scale back your budget. Instead of cable, consider a less-expensive streaming service. Commit to cooking at home instead of ordering out. Make your next clothes purchase at a thrift or consignment shop. These changes are likely short-lived, but your budget will bounce back eventually.
Even if you’re not a numbers person, you need to get a good handle on your finances. There’s a lot to remember: minimum balances, due dates, interest rates. It’s a lot to juggle. Don’t worry; you don’t have to handle it all yourself. You also skip the expensive financial advisor.
Free help is out there. For example, nonprofit organizations, including the National Foundation for Credit Counseling, provide free credit counseling. There are many free financial calculators online, and MyMoney.gov can teach you some valuable points about financial literacy.
Personal budgeting is always a work in progress. Even if your system is running like a well-oiled machine, re-examine it every now and then. You could find spots for improvement. In plenty of instances, these suggestions above can give you a solid financial foundation.