Learning how to budget is something we often aren’t taught in school. If you had parents who weren’t very financially literate this can mean that you had no opportunity to learn about personal finance growing up. Don’t fret, though, because budgeting doesn’t have to be hard, as these simple budgeting hacks will show you.
- Make a budget We can’t start a post about budgeting tips without telling you that the number one piece of advice is to actually make a budget. This sounds obvious, but you may be surprised by how many people become daunted by the process and don’t bother putting one in place, making it very hard to achieve their financial goals. If you don’t know how to make a budget, start with a simple calculation; take your income, minus your expenses, and hopefully, the number on the other end is positive. This is the additional cash that you can use to save or to spend on something you want/need. From here you can dive deeper into the different categories of expenditures that you have.If you don’t have a budget, you might not know how much you actually spend on certain categories, which can make it hard to even begin to get your finances in order. Have a look through at least 3 months’ worth of bank statements to get an idea of the average amount you spend on each category and use this as a starting point. Don’t forget about quarterly or yearly bills, such as car registration.
- Re-evaluate your ‘needs’ When money is tight the things we most need to cut back on are the ‘niceties’ such as subscription services, entertainment and general shopping. Subscription services are something we often just forget to cancel or rarely actually use enough to justify the cost. Check your bank account and cancel any subscription service that isn’t an absolute ‘need’.General spending on items such as going out, clothing and entertainment are where many of us get caught out. The 50/30/20 rule can help you cut back on spending while still allowing yourself a set limit of ‘splurge’ money.
- Plan ahead Yearly or quarterly expenses such as car registration or taxes often seem to arrive at the worst time, even though you have known about them well in advance. Planning ahead and squirrelling away small amounts towards these bills with each pay cheque will help you so that when the time comes you don’t have to rush or panic to find the money.Grab a monthly calendar and take a look at past bank statements to find out when your quarterly and yearly bills are, and make a note of them so that you can start to plan ahead.
- Get a side hustle Another budget hack to turn that negative balance into a positive one to increase your income. Picking up a second job, babysitting, dog walking or even completing surveys can all help towards increasing your income. Don’t forget to keep a note of your extra income for tax time.
- Make marketplace your friend As the saying goes, “one man’s trash is another man’s treasure”. Unless you’ve been ‘Marie Kondo’ing’ to the extreme, we all have things lying around our homes that we don’t use and could easily make some money from. Selling your items on Facebook Marketplace is as simple as snapping a picture, choosing a price and writing a description. Soon you’ll have a cleaner home and a healthier bank balance. Marie would be so proud!
- Track your spending One of my favourite budgeting tips is to routinely track your spending. Writing down your daily spending in a budget planner or spreadsheet will help you become more aware of your daily habits. This can help you prepare for future expenses and more accurately budget for the month ahead.Being honest with yourself as to what you’re actually spending will help you identify the greatest areas of expense. Once you know what these are, you can make a plan for how to reduce them.