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5 Budgeting Tips That You Should Never Miss

5 Budgeting Tips That You Should Never Miss

Who doesn’t want to feel more comfortable, less stressed out and be able to afford occasional luxuries, like travel, gadgets or some nice clothes?

Your finances can impact all areas of life, and can even put an unnecessary strain on your love life, so it is a good idea to learn a few useful things about effective budgeting. Living within one’s means isn’t all that difficult, nor does it require huge sacrifices – you just need to be realistic, ambitious and motivated to make some positive changes. Let’s look at some practical examples of things you can do to put a rein on your finances and start being more strategic with your spending.

1. Focus on prevention rather than the cure when it comes to maintenance costs

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Car broke down

    You see people do this with their health, their home and their car – they neglect regular maintenance and make do, until the moment something goes terribly wrong and they are forced to remedy the problem quickly. The problem here is that if you allow a small problem to grow out of control, you can end up spending a whole lot of money trying to fix it.

    Let’s say your car is chugging along just fine, but you’re not the first owner and have had it for a while. You may notice small problems creeping in if you just do some regular car maintenance, like replacing worn down parts, changing the oil and having a general checkup from time to time. These principles can be applied to any aspect of life – regular maintenance is a huge money-saver in the long run.

    2. Make sure to pay yourself for all the hard work you do

    Sometimes finding a bit of extra money in your budget that you can stash away is just a matter of perspective. Don’t see it as taking some money away from a salary that already has to cover plenty of expenses, think of it as paying yourself for the amazing job you do every single day. As financially savvy people have pointed out before, establishing that your comfort and financial security are a priority makes it easier to justify saving a decent part of your total income.

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    It can be as simple as taking about 5% of your income off the top as soon as you get your paycheck and putting it in a savings account. You can make such payments automatic, which is easier than always trying to resist temptations, and you can slowly increase the amount you set aside as you get more experienced with managing your budget.

    3. When you need something done, do it yourself

    Home repairs

      While certain goods and services are fairly complex and well beyond our own skill level, with many things paying top dollar is more about convenience than anything else. If you buy in bulk, look for sales and cook your own food you can save a substantial amount of money, but it will require some effort on your part.

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      In the same vein, if you devote some of your time and energy towards developing some basic DIY skills, you can take a few fairly inexpensive supplies and make whatever you need. Taking the time to learn how to do some basic repairs yourself is also a good idea. Creating a small monthly DIY budget allows you to stock up on supplies and tools needed for all the crafting and repairs you’ll be doing.

      4. Keep your monthly budget flexible and you won’t break the bank

      Now, as far as your income, in a majority of cases it stays the same throughout the year or is at least fairly consistent. This means that you either have to make some more on the side or rearrange your finances from month to month to face new challenges or afford certain luxuries without having to dip into your emergency fund or stall your savings.

      The simplest way of going about it is to do some budget fine tuning – e.g. if you want to buy a new TV or a fancy pair of shoes, you may have to eat out a couple of times less. Some expenses pop up every two or three months and some are seasonal, so you will have to divert funds from other areas during those periods.  The story of John Steinert, a man in his mid-twenties who is just about to pay off all his student loans and is on a good track to retiring before sixty, shows that you can manage to live comfortably while saving, just as long as you have a good plan and keep things flexible.

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      5. Expect the unexpected costs

      Injured Piggy Bank WIth Crutches

        Last, but certainly not the least, you have to have some kind of buffer, which allows you cover unexpected costs without needing to take out a loan or raid your primary savings account. As we already noted, regular maintenance costs should be covered by your monthly budget – e.g. problems with your car’s engine or a serious case of mold in the attic fall under maintenance costs as they are something you should expect to deal with from time to time.

        Unexpected costs include things like a long hospital stay due to injury, a friend announcing that he or she is getting married out of the bloom, theft, your phone falling down a flight of stairs and breaking, etc. Chances of things like this happening are not that high, but there are plenty of little things that can go horribly wrong, and you need an emergency fund separate from your main savings account to help you deal with these problems as painlessly as possible.

        Applying these tips in your day-to-day life will help you cover the broad strokes of your financial planning, but it is ultimately up to you to set priorities and fine tune your budget. With a bit of luck, you’ll be well on your way to achieving financial stability in the next couple of years.

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        Ivan Dimitrijevic

        Ivan is the CEO and founder of a digital marketing company. He has years of experiences in team management, entrepreneurship and productivity.

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        Last Updated on June 26, 2020

        25 Easy Tips on How to Save Money Fast

        25 Easy Tips on How to Save Money Fast

        “How to save money fast?” This is the question asked by all of us not in the top 1% of rich people.

        If you are looking for ways to drastically reduce your expenses immediately, first look at what you need to spend money on every week. And I mean really need.

        You don’t really need to order in food. You don’t really need to buy expensive perfume.

        Building from that, you can work out how your regular expenses can be reduced.

        As for irregular expenses, they can also be deceptively costly in the long run. Once-off buys can also be tackled with some prudent planning and a little extra research.

        And remember: a budgeted lifestyle does not mean a bad or boring one!

        But first, understand what budget you can cut down on daily:

        • Regular expenses for the average adult (can be trimmed but not eliminated):
          • food
          • rent/mortgage
          • cell phone
          • insurance
          • socializing/entertainment
          • transportation
          • hygiene products
          • household bills
        • Irregular expenses for the average adult (can be eliminated or cut down a lot):
          • travel
          • clothing
          • medication (*depends)
          • grooming (hair, nails etc.)
          • gifts

        Now, let’s dive right into the 25 ways to save money fast:

        Save Money on Food

        1. Bring a stock of food to the office/work

        Instead of popping out for an overpriced salad and a smoothie, leave a set of basic utensils at the office as well as a stock of non-perishable goods such as tinned fruit, tuna, rice crackers and so on (try to avoid the junk food and this can turn into a pretty great diet!).

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        Stocking up means you won’t forget or say “I didn’t have the time” when you rushed out to work in the morning.

        2. Buy the store-brand version

        Many basic foods, such as bread and milk, will taste exactly the same as their branded alternatives. Go for stuff with minimal additives and preservatives. Meat in a tube is probably insanely unhealthy!

        3. Eat cheaper cuts of meat

        Learn how to tenderize and flavour cheaper meat and fish, and save on the (typically) most expensive item on your grocery bill.

        4. Have group dinners

        If 10 friends put $5 each in the kitty, it’s pretty easy to make a giant lasagne and get refreshments, as well as hang out with your favourite people.

        Save Money in Transport

        5. Get a bicycle

        Save on gas money and bus/metro fares with this underrated mode of transport.

        6. Use public transport and/or don’t get taxis

        Some places can only be reached by car. But as a good practise, check your public transport website and see if any routes pass nearby where you need to get to. Walk as much as you can.

        7. Find the cheapest gas

        Regularly check out where the cheapest gas can be bought.

        Save Money in General Shopping

        8. Shop online

        Not only will you save on the gas or transport fares from going to the shopping mall but you will also find better deals

        9. Sell your old stuff

        Get your unwanted belongings up on eBay ASAP and earn a few dollars.

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        Here’re more ideas for you: 25 Things to Sell to Make a Lot of Money

        10. Bulk buying stores

        For regular non-perishable/slow perishable purchases such as toilet paper, cat food, pasta, washing powder and so on, do an epic stocking-up trip to a co-op or equivalent (my mum used to go to a place that restaurants buy from).

        Be wary of supermarket “deals”, as some have been found to be fraudulent after working out a simple calculation.

        11. Become a flea market/car boot sale/street market guru

        You can find original gifts and develop good negotiation skills at these places.

        12. Generic brand medication

        More often than not, the generic version of paracetamol and other basics work the same as the branded version.

        13. Choose deodorant, not perfume

        It blows my mind when someone drops $70 on a bottle of spray. Stick with a nice deodorant, and not only will you smell just fine but you’ll be sweat-free as well!

        Cut Down on Household Expenses

        14. Printing

        Ink is one of the most expensive substances in the office and coloured ink is doubly so. B

        e more efficient and choose black and white, and if your printer doesn’t have a print-both-sides options, just print odd pages first, re-insert the paper and print even pages.

        Expand the margins of what you are printing as often as you can to save on paper.

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        15. Minimize SMS and phone calls

        A combination of a free chat service such as WhatsApp and a free call service such as Skype can reduce your bill to nothing (so long as you have a decent Wifi connection).

        16. Shop around for insurance

        Most people don’t spend enough time searching for the best insurance deal.

        Keep a watchful eye out for deals and new competitors in the market.

        17. Try re-negotiating your rent/mortgage

        If you have built up a good credit history or a good rapport with your landlord, then chances are a frank chat about needing to tighten your spending could result in lowering your payments. You’ve nothing to lose from trying.

        18. Don’t get a TV

        Invest in a computer/laptop and an internet-only package. You can watch more (and often better) entertainment on the web, and skip the advertisements as well.

        19. Pool your internet bill with a neighbour

        My apartment building is basically a big old house split into three apartments. There are five of us in total. We pool the internet bill, making it crazy cheap.

        Save Money in Socializing, Entertainment And Travel

        20. Have house parties

        Instead of paying for overpriced drinks, set up a series of in-house get-togethers with your friends. Everyone takes a turn, so it’s not always your house that needs cleaning.

        For sound insulation, hang heavy drapes on the walls and windows. For music, invest in a good second-hand set of speakers which you can connect to your computer. Let Spotify or Grooveshark playlists do the rest.

        21. Open festivals, meetups and events

        It never fails to surprise me how much underground stuff goes on around me for free or for very cheap. Find out who runs the blogs and websites that list all the less well-known cultural activities.

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        22. Volunteer

        If you can’t pay for a ticket, volunteer and get to be there anyway.

        23. Housesit

        There are multiple housesitting websites offering you the possibility to avoid paying hotels and skip the discomfort of crummy hostels.

        Save Money on Hygiene and Beauty

        24. DIY beauty

        French manicures, pedicures, waxing, eyebrows… pretty much all of these can be achieved at home (and done well) with some practise. There are plenty excellent blogs and YouTube tutorials to help.

        25. Fewer haircuts/volunteer at a trainee hairdresser

        If you can’t bear the risk of a trainee touching your locks, learn more ways to manipulate your hair as it grows and get haircuts sparingly. Women’s haircuts are outrageously priced in many cities.

        Bonus: Effective Money-Saving Tips for Everything

        Here’s a summary of what you can generally do to save more money:

        • Share/pool resources. Organize a neighbourhood sharing scheme, common resources for your apartment block or with your friends. Not everybody needs an individual lawnmower.
        • Buy energy-saving everything. The easiest way to lower your bills – replace those lightbulbs!
        • Buy in bulk. Be sensible about it (i.e. make sure you have space!), and drastically reduce weekly expenditure.
        • DIY. Skill up using YouTube tutorials on plumbing and many other essential services so you never have to pay for simple problems again.
        • Research a lot before making a decision. Most money-wasting is the result of poor preparation and planning. Don’t shirk this part just because you don’t like it!
        • Use your network. Your network is full of resources that can ease the pain of budgeting. Ask for help.
        • Stop and think. Do I really need it?

        Unfortunately, there are some things that require plain ol’ giving up for the time being. This can include high-cost sports such as skiing, the latest versions of some technologies, the finest brands of food/drinks, premier seats at the opera and most other indulgences.

        What is important to remember during lean times is that when you look back on your life, it will be the experiences that stand out, not the extra comforts.

        Living on a budget can teach you a lot about how much you can really get out of your paycheck. We only live one life, so make the most of every penny you earn!

        More Tips for Personal Finance Management

        Featured photo credit: Unsplash via unsplash.com

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