Don’t Forget About Fun
The average person is not going to get excited about budgeting, or automatically think “Oh Fun.” It is important that FUN does not get left out. Incorporate fun items into the budget. Sure there may be times you strap down for a short-term goal, just don’t do it continuously. It can be easy to get burnt out. If you are single, get a friend to budget with. A buddy that will help motivate and drive you. Celebrate milestones together or even have competitions. Create fun budgeting nights, couples can make them into date nights. Talk about goals and what you want for the future. For people budgeting together, this helps to ensure everyone is on the same page and allows time for each person to voice their wants. Rewards may be included for achieving a goal. Rewards can be big or small, depending on the budget. Check out events and festivals in your local area. These are typically put on for free or have a low-cost associated with them. Whatever you do, keep the fun in your budget, which ever works best for you!
How To Stay Motivated To Budget
We created a budget, now to stay motivated to budget. Keep your eye on the prize. Short-term goals provide successes to celebrate, and it is important to celebrate those successes. Even tracking the progress towards long-term goals. Keeping track helps motivate you to continue on your journey. Which is why visual’s are good, as well as looking at your budget worksheet from previous months to see the progression. There are many different budgeting methods out there. If a method isn’t working for you, try another. Make sure to use the budget that works best for you. Something else to keep in mind, life happens. If you get off track one month, don’t give up. It happened, move on and move forward. Life happens, something unexpected comes up, maybe we spent more in category we shouldn’t have. It happened, move on from it and get back on track!
Being On The Same Page
If you are in a relationship, it is important that you are on the same budget. Living on a Budget is not the easiest task. If one party is watching how money is spent, while the other is out spending, that adds pressure and increases the chance of failure. If you share money, that makes it nearly impossible if you’re not on the same budget.
In relationships, a fight topic can be money. This can be a result of not talking about money. Each may have a different idea of budgeting. Goals may be different. If goals are the same, each person may have a different idea of how to reach those goals. Talking about it early will ensure everyone is on the same page.
Have You Set Goals
When wanting to have an effective budget, it is important to set goals. Goals provide something for you to strive for as well as a way to mark success. Goals also provide a focus to your budget. Remember when we talked about planning for wants? Goals can be a vacation, new shoes, some new gadget, or a focus on a particular debt. The direction of your budget depends on you. Personalized to what you want, what your goals are. Goals should be both short-term and long-term. Ensure to write them down somewhere so that they aren’t forgotten. Celebrate when they are accomplished, then set a new goal to replace it. When additional money comes in, from a bonus or a tax refund, set goals for those funds prior to getting it. There should always be a plan for your money, this allows for control. Without goals what is your budget doing. Is your budget controlling you or are you controlling your budget?
To Save or To Pay Off Debt
How to decide to pay off debt or to save? Here is the thing, if you don’t save and focus all money on paying off debt, there is potential of creating more debt. Things always come up, either with your car, some household related item, and let’s not forget about birthdays and holidays. Life always provides us with the unexpected. When planning a budget, even though the cost may be unknown, we can still plan. For instance, birthdays and Holidays come every year. One thing my wife and I do, we have a separate savings account solely dedicated to Gifts. Every check money is put aside into the account. That way every Birthday or Holiday that comes around, money is available for that purchase. We also have an account for car maintenance. This account covers oil changes and any car maintenance issues that may come up. Money is available when needed, that way we don’t risk the need for a credit card purchase, which will then increase our debt.
Here is the thing, this does not mean we need to dedicate to savings before paying off debt. Doing this will cause stagnation with your money. Yeah, savings may be building up, but your debt is not moving anywhere. Also consider the interest that is building on that debt, which is actually adding to your debt. Balance is key. Finding that sweet spot between savings and paying off debt is key.
How Much Is Your Car Payment
A normal way of thinking, is that we must always have a car payment. Car payments require some type of financing, which typically includes an interest rate. Whether it is in the form of a bank loan, or one of those Buy Here Pay Here. Car payments are high, then adding on top of that car insurance every month. Most car dealerships also offer leasing options, where your monthly car payment is lower since it is not the full value of the car. The idea behind those, when the lease is up, get another car with a lease, which perpetuates the idea of a car payment every month. What if breaking away from that mindset, that a monthly car payment was inevitable. Planning, budgeting, and paying cash for a car, wiping out the car payment. At the very least, coming up with a hefty down payment, which would in turn cause that monthly car payment to be lower. This idea may seem daunting. Is that new car really needed, or is it just wanted to show off. Used car options can be great, especially when locating a reputable used car dealership that isn’t constantly spitting out “lemons.” Did you know, when purchasing a new car, once driving it off the lot, the car automatically losses value. After spending all that time at the dealership, all that money, and before even getting home the first time, money is already gone. Making monthly car payments on a price the car is not worth. Think about it, and as always, research.
Are You Cutting Cost
So, you are adjusting to life on a budget. Following the worksheet and making adjustments as needed. Now, for cutting cost. Cutting cost is something that can be done drastically or lightly. If you are someone who needs that adjustment period, then ease in to it. Remember to be successful, honesty is key. There are many ways to but cost. Could be as simple as cutting out Starbucks everyday, or going just once a week. Coupons can be helpful as well. The web is covered with websites, and apps, solely designated for coupons. I personally like Publix and their BOGOs to help with cutting cost. Another way to cut cost is forgoing name brand products for off brand. Now don’t get me wrong, some items I have to buy name brand, like laundry detergent must be Tide, but other things are off brand. Cutting cost will help in paying down debt, or help to pay for one of those “wants.”
What is my Side Hustle?
In the last post I was talking about the benefits of a side hustle, and of course I have a side hustle. I love dogs, I have four of them. Due to that love, my side hustle involves watching dogs. Rover allows me to watch as many or as few dogs as I want. They take a percentage of my visits, which covers their cost such as Insurance, advertising, they handle the scheduling and the payments. I control my availability. I took something that I love, and provided myself and wife some additional income. That additional income helped pay off debts, got us a “want,” or assisted with a vacation. There are so many other online options out there. If you like to drive, there is Uber and Lyft, and I am sure some others. If you are into crafts of any kind, or woodworking, there is Etsy, Facebook Marketplace, and others. Find you passion, enjoy life, and enjoy your budget.
Get Your Side Hustle On!
Do you have a side hustle? Something you make money off of. A passion or hobby you enjoy doing and passionate about. Make money from it. A side hustle is something you do while still working, and hey maybe make some extra money on the side doing something you enjoy. Are you an artist, hair stylist, love animals, or a creative genius? The internet today provides so many options for us. Social media sites, online store front options, and online advertising. Jeff Rose wrote a great article for Forbes on the topic. We are all connected online in some fashion, take advantage and get your side hustle on! Extra money always helps out the budget!
Short Term Savings Account
When creating your budget, we mentioned setting up two separate savings account. Short term savings account and a long-term savings account. What is the difference and why two? Short term savings account is for those things that you “want,” remember the idea of budgeting is not to keep us from getting what we want, but to track our spending and have control. If there is something “extra” wanted, then just create a plan and budget for it. If a new TV, game console, that Michael Kors purse, shoes, or that vacation, then that is what short-term savings is for. You budget and save up to make the purchase.
Long Term Savings Account
Long term savings account is for those big unexpected issues. This would include, losing a job, big home repair, big car repair, or other unexpected big-ticket items that will impact you. Long term savings should be built up to the point that you could support yourself for up to 6 months if need be. I would also suggest that your long-term savings account be setup in a separate banking institution then the bulk of your other accounts. Long term savings should be something you can get to, just not instantaneously. By having it separate, it will also be out of sight and out of mind. Since long-term savings for the most part will be just “sitting,” check out interest rates and get the biggest return out of your money.