After a busy and expensive holiday season, we often want to start afresh with new financial goals. Whether it’s to improve our financial outlook, banish debt, save for a particular purpose, or install a safety net after the holidays is the best time to start looking towards a brighter financial future. Our New Year’s Resolutions can give us that extra boost of motivation we need to get our finances organized, managed, and on track for the year to come.
Of course, with overspending during festivities, achieving your goals can feel like an impossible task. After splurging on gifts for relatives (and yourself), buying lots of cookies and cakes for Christmas parties, and generally, the lack of worrying during that time can put one in a financial quagmire in the early days of the new year. However, with some simple, stress-free budgeting you can limit the overspending and find the ways to help you save some cash. So, what are the best tips and tricks for stress-free budgeting?
- Have a goal
Without a goal to aim for, you won’t know how much to put away or how much to cut from your current spending habits. Try setting incremental goals to help you spend less and encourage you to keep saving. For example, for one week, try not to eat out. If you give yourself this short-term goal, meal prep won’t seem so daunting, and you know that in only seven days you can go to your favorite restaurant for a bite to eat. That is vastly different than an abstract, non-concrete goal like “don’t eat out as much”. If you find yourself struggling with the goal, then it may be set too high. Start smaller and increase it gradually.
- Track everything
Use an app or spending journal to log every incoming and outgoing. Recording every single item that you spend money on is a real eye-opener. Once you see your spending habits, start to categorize each purchase. Was it a necessity or simply an indulgence? When you spot how many of your purchases are unnecessary, you will realize how much you can save. With this technique, you can also find your weaknesses, such as meals out or buying gadgets, and learn where to curb your spending.
- Find a no-fee bank
Another important way to stop you spending more than necessary is to find a bank that will not charge you any additional costs. With any form of spending, banking fees can quickly add up, but it is easy to find accounts that will not charge bank fees. As soon as you switch, you will instantly have an extra amount per month which you can transfer into a savings pot.
- Prepare for emergencies
Unfortunately, unexpected costs will arise. Whether it’s a home repair, an additional bill, or a vehicle breakdown, there will be a cost that you have not budgeted for. While you cannot estimate how much you need to save for emergencies, it’s always wise to put some money away into a saving pot dedicated for emergencies, even if you are trying to clear a debt. That way, you will have some cash available to take care of problems when they happen.
- Make your plan and stick to it
While deciding how you want to budget, the amount you want to save and proportion of debt you want to clear per month will be essential. While you may need to tweak it in the first month to cover a cost you have forgotten about, the secret to a stress-free budget is sticking to it. Keep your goal in mind, know that you’re going to achieve it with all the plans you have in place, and enjoy working towards something that is rewarding.
Achieve your goal
Once you’ve achieved your goal, great news! You now know how to budget successfully to achieve something important to you. After celebrating (within budget), make sure you set another target with another budget plan and keep the good work going. With a budgeting system, you will find all your finances are hassle-free and easy to plan.