The beginning of a new year often sparks the desire to make positive
change within our lives. If you’re reading this article, chances are you’re starting
to think about budgeting your money as a means of achieving financial success. First things first, give yourself a pat on the
back!
Despite the significant positive impact budgeting can have
on one’s financial well-being, a lot of people don’t take the time to track
their expenses or plan for the future. Whether you’re just starting out or have
been budgeting all along, here are some tips you can use to help you gain a
better understanding of your finances and to help you save money.
1. Understanding Your End Goal
Before you begin your budgeting journey, it’s important to
identify and understand your end goal. Are you looking to gain a better understanding
of your current spending habits? Or perhaps saving up for an expensive vacation?
Having set financial goals will help you cater your budgeting to fit your
specific needs.
2. Track Your Spending
And when we say track, we mean track. Every. Single.
Expense. Whether it’s that new jacket
you’ve had your eye on or an impulse visit to your local coffee
shop, it’s important to track every single item you purchase to get an accurate
idea of what you’re spending. Once you start tracking, you may be surprised to
see how quickly small expenses add up! Seeing the big picture can inspire you
to start incorporating more money-saving
habits into your daily
routine.
3. Charge It
One way to make budgeting easier is to charge everything to
a credit card for a designated period of time. This is an easy way to keep
track of everything you’re spending money on. Use this knowledge to identify
areas that need improvement. Ask yourself what expenses you could cut back on
and what expenses are more of a necessity. An added benefit to this budgeting
method: paying off credit card payments in a timely fashion is a great way to
build credit!
4. Ask Questions
If you’re feeling unsure about your
financial health or have specific questions about how to achieve specific goals,
you may want to consider setting up time to meet with a financial advisor.
These sessions are particularly useful if you have questions specific to your
current budget or goals. If you’re still in college
then you may have access to a financial advisor through your career services
office. Explore the options available to you in your community and online!
5. Take Advantage of Free Resources
Ah, the wonderful world that is the internet! Long gone are
the days of having to come up with a budget template on your own. Thanks to
modern technology, there are a variety of resources available for little to no
cost online.
6. Prioritize Savings
One of the most common goals behind budgeting is to save
money. Rather than waiting to see what’s left in your bank account at the end
of the pay period, prioritize your savings by putting money aside first. Having
a dedicated effort toward building your savings account is the best way to save
up and fend off erroneous expenses. You might even consider automating deposits
into your savings account rather than manually moving it over each pay period.
Automated deposits can be less emotionally taxing, and after a while you’ll
forget the money was ever taken out.
A great way to help you prioritize savings to is create
“sinking funds”. Sinking funds are accounts set up and specifically labeled for
individual financial goals. You might have a sinking fund called “New
Car” or “First
Home” or “Vacation to
Italy” and so on. This trick helps you mentally associate the money you’ve saved
with the goal you’ve set and it’s easy to track your progress!
7. Start Today
The sooner you start tracking, the sooner you’ll have a
better handle on your finances and can start saving. While budgeting may feel
like a chore,
being proactive will yield amazing results.
Now that you have the tools to hit “refresh” on your
finances and start taking control of your financial health, you might also be
interested in learning what our CFO has to say about personal finance. Check
out the link below to learn more.
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