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10 Ways To Stay Accountable With Your Money and Finances

10 Ways To Stay Accountable With Your Money and Finances

Budgeting is more than simply allocating money for monthly expenses. People who know how to budget have a systematic way of handling money. Aside from regulating their spending, frugal people often have their finances planned in advance.

However, sticking to a financial plan isn’t as easy as it may seem. Many of us quit our budget plans the moment we mess up our finances. We give up after a month or two of recording and track expenditures. Is there an easy way to track your budget and finances? Here are ten simple points to remember:

1. Think Strategically

What is the whole point of making a budget? When making your budget, always remember that it’s there to help keep you out of debt. The goal of your budget is to create a better  future that will give you more financial freedom.

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2. Set Financial Goals

Is there a project you want to save for this year? What financial goals can you set to make this project happen? When creating goals, make sure you’ve both set up short and long term plans. There are a lot of money management apps out there that can help you allocate your money easily.

3. Prepare for Emergencies

Always have an emergency fund. When things aren’t going well, an emergency fund can save you from debt and stress. Prepare in case of medical emergencies, layoffs, or divorce. Proper preparation assures that you have money for what’s important to you.

4. Limit Budget

When you are too comfortable with your budget, you find it easier to slip into overspending. Try to limit everything to a fair calculation. Don’t give yourself a lot of money to spend for things you don’t even need.

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5. Set Boundaries

Lending money to friends and family members are sometimes the cause of money shortage. So before you decide to lend money, make sure you have your own finances in order first. There is always a possibility that your money won’t be given back by a friend or family member.

6. Take Away Options That Make You Cheat Your Budget

Stop carrying credit cards if you are prone to buy impulsively. Instead, carry cash all the time. Quit browsing on your favorite online shops if you are out of money. You can block the site if you find yourself compulsively checking it out. On this same note, you can also create visual reminders that will help you remember your goals. For example, you can display a note to remind yourself to stay on budget.

7. Find Like–Minded Groups

Find a friend, support group, or online friends who are determined to keep their finances planned just like you. Having a finance buddy could help you to stick with your goals and stay accountable. You and your penny-wise buddy can even exchange spreadsheets (within reason) and evaluate spending.

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8. Build A Reward System

Don’t forget to give yourself rewards for a job well done! Staying faithful to your financial plan for a month is a big deal, that’s why you should give yourself a pat on the back. Find an inexpensive activity or item that will fit as a pleasurable reward for you.

9. Track Your Spending

Track where your money goes. This technique will help you stay accountable and on budget. There are many apps that can help you manage your expenses like Money Manager, Mint, and Good Budget.

10. Schedule A Periodic Budget Evaluation

Don’t forget to evaluate. Monitor how you are doing with your finances. What are the factors that prevent you from staying on budget? What categories can you tweak to create a better and more accountable financial plan? Set aside a specific time or the day or week to make sure you’re not overspending.

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Conclusion

Knowing a lot about finances and money management can help you create a debt free future. So invest in yourself but avoid instant gratification. Spend your time getting tips and advice from financially-savvy people. You can even hire an accountability expert or a financial advisor if you find it hard to do on your own. Ultimately in finance, the more you know about money, the better you’ll be at managing it.

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Armela Escalona

Freelance Writer

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

Reference

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