Four Easy Tips For Better Budgeting and Saving Habits

Having trouble committing to your budget? You started off the year with some pretty specific goals like losing 15 pounds, being more creative, and saving money. So, how is that going? You know that saving money is a good thing — you even read articles on the most efficient saving habits ;and you have created around 20 different budgets throughout the years. But, have you found the best habits for better budgeting?

Simple Tips For Better Budgeting

Each time you create a new budget you say “this is it, I can commit to this!” and after one too many fun (read: pricey) evening out, or trendy new items impulsively bought, you break budget and feel defeated. Sticking to a budget does require discipline and dedication, but never fear we are here to help! Apply a few of these money saving tips to your budget and watch your savings account increase while your financial concerns slowly decrease.

Create an Untouchable Savings Accounts

Create a separate bank account that is saved only for extreme emergencies. The goal is that this account will have enough for you to live off for 1-2 months, should something unexpected happen. The funds in this account are to be reserved in the event that an income stream is lost, or a major illness befalls you or a family member. You want to avoid using this for slight inconveniences like car problems or last minute expenses. Experts recommend choosing an account that has little to no fees and a high yield. Here are some examples:

  1. Barclays
  2. Ally
  3. Synchrony

This leads us to our next point.

Account For Unexpected Expenses

Having a regular savings account with an emergency fund is a good idea for covering last minute expenses that always seem to come up. Covering the cost of an unexpected car problem or any other expense that you did not predict in your monthly budget is the purpose of this account. You have a bitmore liberty to access this account in the case of emergency unlike your untouchable account which is reserved for extreme situations. This account should have a steady percentage or dollar amount being deposited each month to help you keep it topped up. Your current bank should offer savings accounts with your checking accounts, so do speak with your bank representative to find out more.

Planned Recreation Makes For Better Budgeting

Seems counter intuitive, right? But it works. Decide which social events you want to attend most, and plan how much you will have to spend for each. In most cases, shopping and social activities are the biggest culprit in breaking budgets. For this reason leaving some extra wiggle room for these activities will help you succeed.

Pre-budget for travels as well. Try to go into the year knowing which vacations and work trips you will be attending, then plan for some spontaneous trips. This will help you to be better prepared financially to fund your adventures. Of course this isn’t fool proof you will have to rely on some personal restraint and discipline, but we believe you can do it! Having money allocated towards fun will help in two ways:

  1. You won’t feel as if your budget is all work and no play. This feeling of being trapped by the mundane is most often to blame for random splurges. Setting funds aside for recreation gives freedom when budgeting.
  2. It will eliminate the guilty feelings after a night out.

And the last thing to consider…

Keep Visual Reminders Around the House

What are you saving for? Retirement, a new home, new car, children, travel? It can be tough to commit to a savings plan when you have no reminders of why you’re saving in the first place. It is difficult to fight the carpe diem philosophy with no savings philosophy of your own. This is when your arsenal of visual reminders comes into play.

There are several creative ways to keep your spending and saving goals visible: vision boarding, post-it notes on the bathroom mirror, affirmations and reminders on your phone. Reminding yourself why you are saving in the first place is a powerful thing because it keeps the end goal at the forefront of your vision. Your visible savings goals may also prompt you to act more aggressively when you have the means to save more.

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One of the biggest misconceptions about saving is that a person needs to be over a certain income threshold in order to save. Saving is related to income vs expense, not just income. With nearly any income a person can add to their savings by finding creative ways of cutting expenses. When creating a budget, keep in mind that this is for your benefit. Saving for big purchases is an attainable goal. You are going to have to make sacrifices and may spend some weekends at home with Netflix, but when you realize your goals it will all be worth it!