Quick Tips on Making the Most of Your Debit Card
If you have a checking account, you probably have a debit card to use with it as...
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When you hear the word “budget” you might not get a warm, fuzzy feeling inside. The word has often been associated with having a lower income and being strapped for cash, but the reality is that a budget can be a huge asset to making the most out of your money, allowing you to achieve your financial goals.
Budgeting your finances can be an intimidating task, especially if you’re just getting started. Which is why we want to give you some practical tips for budgeting and saving that you can work with, while still having the freedom to enjoy your life without having to worry about overspending.
Know the Reason
The best way to start out creating a budget is to determine why you want to create one in the first place. Maybe you have a destination wedding that you were invited to, you want to save up for a new car, or just don’t want to spend so much money. It’s important to determine your reason for creating a budget, as it can be a great motivator when you’re tempted to spend money on something unnecessary.
It Pays to Prioritize
Make sure you know the difference between needs and wants. Once you make that determination, prioritize the essentials first, like rent/mortgage, groceries, transportation and other bills. Then you can focus on other goals you might have, like paying off debt or saving for your retirement. The 50/30/20 method of budgeting is a good example that covers the major categories. In this method, 50% of your income goes towards your essentials, 30% goes towards wants (like going out to eat, concerts, shopping, etc.), and the last 20% goes towards savings and paying off debt.
Keep in mind that not every method works for every person. You might find that the 50/30/20 method doesn’t work for you. There are a variety of other budgeting methods that you can try out until you find the one that’s the right fit for you. You might even want to consider looking into apps that help you visualize your spending habits so you can stay on track with your budget.
Track Your Progress
It can be easy to simply write down your goals or reasoning for the budget and then simply forget about them, which is why it’s a great idea to track your progress. At the end of each month, take some time to look at your budget, and how well you stayed within it during the month. Maybe you noticed that you spent too much money going out to eat so you need to be more conscious next month about cooking meals at home. Most importantly, be honest with yourself. If you’re struggling to stay within your budget, you might need to cut expenses or adjust the budget so that you can move forward in your journey towards your goals. NuMark offers a budgeting tool called Money Management, which you can find more information about on this page.
Automate Cautiously
Technology can be a huge help when saving and budgeting your money, by taking away some of the more tedious tasks like paying bills. Consider setting up an automatic bill-pay for your electricity, gas or other monthly bills, so you don’t have to worry about forgetting about one and having to pay an additional late fee.
One thing to be aware of when utilizing automated payments, is that you might have subscriptions that you forgot about. Maybe you paid for a streaming service to watch an original show but no longer use the service. That money is still leaving your account and not even being used. Be sure to check on those subscriptions so that you can cancel the ones you no longer need and save yourself the money and stress.
Expect the Unexpected
Accidents happen, and sometimes smaller purchases like occasional impulse buys might slip through the cracks. But there are ways to be prepared for those expenses. Making sure to include a miscellaneous section in your budget for those unexpected payments, or to add to an emergency, are a great way to prepare you for those unexpected payments like fixing your car after a fender bender or a doctor’s appointment if you fall ill.
Be Kind to Yourself
This might be the most important tip of all. Nothing is perfect, not your budget and not even you. It can take some time to adjust to staying inside of your budget, especially if you’ve never had to make one on your own before. In fact, it can sometimes take up to four months to get used to it, so be patient with yourself and don’t get too hard on yourself when you go over budget every now and again. Mistakes are a part of life, and what’s most important is that you keep your head up and try to learn from them.
Budgeting can certainly be a difficult task. Whether you’re new to creating one or need to adjust it for changes in your life, like getting married or having a child, budgets are an important tool for you to create strong and healthy financial habits. Remember that there are lots of resources out there to help you save and grow your money so that you can reach your fantastic future faster.
If you’re looking for more resources on how to build your savings, check out more information on our website, or call (815) 729-3211 to speak with one of our Certified Credit Union Financial Counselors.
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