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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 March 29, 2021

        Life Insurance: A Secure Way To Protect Your Future.

        Life Insurance: A Secure Way To Protect Your Future.

        Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

        Importance of getting a life insurance

        No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

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        On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

        Choosing the right insurance plan

        If you’re about to select an insurance plan, you should consider some important factors:

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        • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
        • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
        • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

        Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

        Differences between life insurance plans

        Here’s a short brief of some plan categories you can choose according to your needs:

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        • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
        • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
        • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
        • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
        • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

        Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

        So what are you waiting for? Plan for your future and live a happier and carefree life today.

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        Featured photo credit: aryehsampson.com via aryehsampson.com

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