Metro graphic Portioning out your hard-earned dollars into a budget can be tricky, but there are a few tricks that will help keep more of those dollars in your pocket. Metro graphic Portioning out your hard-earned dollars into a budget can be tricky, but there are a few tricks that will help keep more of those dollars in your pocket. Budgeting is like New Year’s Resolutions – we all know we need to make changes and follow a plan, but how long do those plans usually last? For many people, saving and keeping a budget is so difficult that they deprive themselves of ever reaching the financial happiness they deserve.
When everything else has failed to work, these five budget tricks may be just the thing you need to save money and stick to your budget finally.
Budget Tricks #1: Out of Sight, Out of Mind
I had a teacher in high school that used to say, “Show me an income, and I’ll show you how to live above it.” Let’s face it, spending money is just too much fun. If you have the extra money in your budget, there’s a good chance you’ll spend it.
Case in point: Amber Heard filed for bankruptcy last month, defaulting on debts and promised donations, even though she earned $2-million for a few weeks’ work on Aquaman 2.
If you’ve tried everything else and just can’t seem to save money, try hiding it. We’re not talking about burying your money in the backyard.
Instead, check out some automated savings programs like Bank of America’s Keep the Change Program.
The purchase price is rounded up when you use the bank’s debit card, and the difference is automatically transferred from your checking account to savings. So that $3.50 for a triple-choco, Venti coffee takes $4 from your checking and transfers $0.50 to your savings account.
Don’t miss out on a savings account interest rate of 1.50% on a Discover Online account. That’s about five times the average on savings accounts nationwide, and you pay no monthly fees.
Another way to track your budget by hiding money is to lock it up with Certificates of Deposit (CDs). These are short-term notes sold by the bank that pay interest from three months to three years. You cannot use the money until the CD matures or could face a penalty or loss of interest, so it forces you to keep the money saved.
Budget Tricks #2: Spend Money to Save Money
Most people say, “Spend money to make money,” only jokingly, but it may actually be true that you must spend money to save money.
Just out of college and after landing my first real job as a financial analyst, I set out to save every penny. I skimped and worked extra jobs to build my nest egg and reach financial freedom.
I was saving so much and working so hard that I would burn out every few months and end up going on a spending binge. The financial equivalent of yo-yo dieting was constantly setting me back to zero.
Make sure you spend at least a little of your hard-earned money every month. Budget your fun money carefully but make sure you’re enjoying life and can keep to your goals.
Budget Tricks #3: Turn your Budget Upside-Down
Most people start their budget by first taking expenses out of their income. Unfortunately, by the time they work through all their expenses, there’s nothing left for saving and investment.
They don’t feel particularly motivated to reduce expenses because they can pay everything with their current income. The result is little financial discipline and a savings account that never grows.
Turn your budget upside-down with this budget trick. Take out the money for savings and investment before your normal living expenses. The general rule is 10% of your income, but you might want to try a little more depending on the time you have left to reach your financial goals.If you cannot meet your expenses with the money left over, then it’s time to start cutting back.Budget Tricks #4: Invest in Yourself and Make More MoneyWho needs budget tricks when you’re able to make more money? So stop spending all your time worrying about how to save money and spend a little time thinking about how to make extra money.Ideas on making extra money range from quick surveys and social media sharing to full-on side hustle projects.What, you don’t have an extra five hours a week for a side-hustle? The best way to make extra cash is through passive investments like dividend investments, bonds, and peer lending. […]
Protected by Patchstack