Just like charity begins at home, so does saving. If you want to save a handsome amount of money by the end of the day, week, month or year, you’ve got to start practicing frugal living habits which can take a start from managing your household budget.
Trust me as you learn to live economically you will realize how much you can save by certain small steps in your daily lives. Your child’s higher education might need to be funded in the near future, for which you will need substantial funding.
So why not start saving on a daily basis? Some of these tips are just the use of simple common sense that will make your life fall right into place.
Home budgeting tips to follow
Tip # 1: Keep a track of your spending patterns
Just like identifying the problem is the first step to finding an apt solution to it, similarly, in order to budget effectively, you need to precisely identify the channels through which most of your finances are being funneled out. We need to understand that budgeting helps us prioritize things that matter the most and by keeping a track on the minute to major expenses that we make in a day will be like an eye-opener. Many of our petty expenses may go unnoticed if not noted down, which might accumulate to a handsome amount by the end of the day.
Tip # 2: Save first, and spend the rest
When budgeting, it is a rule of the thumb to make it a point to save first. You can accomplish this by setting aside a fixed amount in the first place to save and then allocating the remaining amount to be spent on individual budget categories. Budgeting is all about spending far less than what you earn and the role of behavioral finance is quite pivotal in this regard. You need to setup a savings account and put strict limitations on using that money.
Even if it calls for sacrificing your “fun” budget, you should realize that it will do wonders for your financial stability in the long run. Use the “fun” money in more productive and viable ways such as making the habit of having home-made meals, putting off a major purchase and delaying your vacation to fulfill the necessary expenses at hand.
Tip # 3: Save energy, save money
While home budgeting, you might only take into account the apparent expenses that seem to drain your bank account; however, electricity bills, other utility charges, and student loans might be taking a toll on your pockets. You need to save money fast when faced with a financial crisis and one way you can do that is by saving energy. Conserving energy is just a few steps away, simply by wasting unnecessary resources, turning off the lights and fans when not in use, saving wastage of water etc.; Ingrain it in your child to practice these energy saving habits to reap the benefits in the long run.
Tip # 4: Do not make unrealistic targets
Budgeting goals should be ‘SMART’, that is they should be Specific, Measurable, Attainable, Relevant, and Timely. Complying with these standards will help you realize that small steps yield productive results and big steps usually end up being a failure. Often seemingly huge targets can be unrealistic and might just be exhaustive and nothing fruitful as such might be achieved.
This can be aptly compared to diet planning. When you try to go overboard and drastically cut down on your intake of favorite foods or food high in calories and carbohydrates for that matter, you will fail awfully. You may feel that you will be able to do it if you are determined, but even the most consistent efforts might be futile if the target bar is high. Set small and achievable budgeting goals that will serve as stepping stones to further accomplish even more challenging financial goals. You’ve got to start somewhere and you’ve got to start small. When you will be successful in achieving the short-term goals the long-terms goals will automatically fall in place.
Also, it will prevent undue pressure building up on you and help you relax a bit, you need to ensure you are getting proper sleep and your mind and body are in proper working condition to help you stick to your budgeting goals. Sometimes, we need to let ourselves free and just go with the flow to be prepared to embrace the ups and downs of life.
Tip# 5: Tweak your budgeting strategy every month
After implementing a certain plan of action, evaluating the actual outcome with the desired one is an absolute necessity. If, at the month end you realize that your budget has some loopholes which deterred you from changing your spending habits, you should not be disheartened or be scared that you will have to suffer any losses. You can always revise your budget and re-assess the necessary amendments. Don’t let anxiety overtake you, neither do you need to abandon your plans, you just need to go back and revisit them.
A budget should never be drafted in an ideal way that it never gets followed in the true sense; in fact, a practical one can always be tweaked here and there as you learn with experience. As you get a firmer hold on your finances you will realize that you are able to funnel more amounts to savings accounts and also invest in something financially viable for your future.
This post was written by Brooke Whistance, a passionate home and lifestyle blogger. Currently, she is working for Home and Social, an interior design and home decor blog. Follow @IamBrooke94 for more details.