No matter what shape your finances may be in, create and stick to a budget that can improve anyone’s financial health. Whether you’re trying to save for a house, repay a loan, or simply have a little leftover from each month’s paycheque, a realistic budget can help you reach those goals.
Many people find it easiest to use an excel budget template (you can download one for free here) when creating their budget, so they can see all of their expenses and where they can afford to save. Split your budget into sections so you can see where your money goes, from necessities like food and rent/mortgage to luxuries like entertainment expenses and eating out.
Making your budget is the easy part. Now, all you have to do is stick to it! This is definitely easier said than done. However, with a few tricks and some lifestyle changes, you can restrict your spending without feeling like you’re missing out.
Easy tips to curb excess spending:
Make a shopping list, and stick to it.
So much extra spending goes on impulse purchases. If you make a list based on your needs and don’t allow yourself to stray from it, you’ll soon see a big difference in your wallet. While you’re at it, don’t go grocery shopping while hungry!
Keep your receipts every day for one month.
This is an excellent way to get a real overview of what you’re spending your money on. Maybe those morning lattes or after-work drinks are happening too often? Perhaps you’re eating lunch out a few times a week? What may seem like a minor amount of money can quickly add up over time. You might surprise yourself by how much you’re really spending.
Ask yourself if you really need it
It’s easy to be tempted by new technology or a sale, but always ask yourself if you really need an item. Chances are, you don’t. If you’re in the mood to treat yourself after a bad day, try to keep your financial goals in mind. Think of how you’ll feel once you’ve paid off your debt, or put down your deposit on a house. Then keep going.
Use cash, not cards
Out of sight, out of mind. It’s easy to overspend when your money is coming directly out of your bank account or credit. Instead, take out how much money you intend to spend each week. Once you’ve run out of cash, you can’t take out more. If you find yourself needing to take out more, then either your budget is unrealistic, or you didn’t stick to it.
Sleep on a new purchase – always
If you really want to get something new, give yourself at least one night to sleep on it. This really helps to curb impulse purchases and the lure of a sale by making you consider the purchase rationally and carefully. If you decide you really do want it and can afford to buy it, you can always go back and purchase it.
These tips can only work if your budget is reasonable. Review your budget regularly and keep on top of your finances. If you end up coming in under your budget – fantastic! Put that extra cash towards your savings instead of finding a way to spend it. Your future self will thank you for it.