If you’re ready to master the art of personal finance, you’re in the right place. It’s a great feeling to have a handle on your finances. Knowing how much money you have, knowing what you spend it on, and knowing how much you’re making are all important first steps to building financial independence.
But budgeting isn’t as simple as it seems. Business Insider surveyed people from all walks of life to find out the most confusing aspects of budgeting. Here are their top five budgeting tips to keep in mind as you begin your path to becoming a self-sufficient saver.
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Set up an auto-pay for your credit card and auto-digest for your savings account
Credit cards and automated savings accounts are both excellent ways to make sure you always have money in the right place at the right time. But they also often have a fee attached, which can eat away at your savings — especially if you don’t have a lot of money saved up.
To avoid fees and set up recurring payments, you can set up an auto-pay for your credit card. That way, every month, you just need to remember to pay it. It also ensures you’re never late with your payments.
But also set up a savings account that can deposit money automatically, like a savings account with an automated transfer from your checking account, so that you can start saving money without even thinking about it.
Do your research before you shop
You will spend the majority of your time shopping for food, clothing, and shelter — the most basic necessities. This is why it’s so important to research what you’re buying.
If you want to avoid buying things that you don’t actually need, start by asking yourself these four questions:
Is this something I really need or just something that I thought I wanted?
Am I buying this for myself or for someone else?
How will this affect my family if we have to eventually sell this item?
Does this make me happy?
If you find yourself answering “yes” to any of these questions, then it’s probably not a good idea to buy it.
When it comes to clothes and shoes, you can save money by buying secondhand. There are many online resources that allow you to find and buy used clothes, or you can check with your local thrift store. You should also consider buying hand-me-downs from friends and family members — they’re generally in good condition and still have plenty of wear left in them.
If you’re tempted to buy an expensive pair of shoes or a trendy piece of clothing that isn’t necessary, ask yourself these questions before you pull out your credit card.
Is this something I really need or just something that I thought I wanted?
Am I buying this for myself or for someone else?
How will this affect my family if we have to eventually sell this item?
Does this make me happy?
Find a way to reduce your spending
This might sound simple, but you’d be surprised how many people aren’t aware of all the ways they can save money.
Here are some tips to get started:
Get a second job: There are a ton of opportunities for freelance writers, photographers, and bloggers out there who are looking for work — particularly if you have a passion for a certain niche. This way, you can make a little extra money without having to take on additional responsibilities at your day job.
Start a side hustle: This can be as big or as small as you want it to be. You could start a blog, freelance piece writing, or even teach a course. The point is to find something that you love doing and will bring in extra income.
Learn to cook: If you’re anything like me, you always see recipes for delicious meals in restaurants and magazines, but never have time to make them. Cooking at home is not only cheaper than eating out, but it’s healthier, too.
Become a savvy spender: Everyone has areas in their life where they can save money. For example, maybe your family only uses the car on weekends but you take the whole family on vacation once a year. Or maybe you only go out for dinner once a month but your partner loves to go out for drinks every night.
Get a second job: There are a ton of opportunities for freelance writers, photographers, and bloggers out there who are looking for work — particularly if you have a passion for a certain niche. This way, you can make a little extra money without having to take on additional responsibilities at your day job.
Start a side hustle: This can be as big or as small as you want it to be. You could start a blog, freelance piece writing, or even teach a course. The point is to find something that you love doing and will bring in extra income.
Learn to cook: If you’re anything like me, you always see recipes for delicious meals in restaurants and magazines, but never have time to make them. Cooking at home is not only cheaper than eating out, but it’s healthier, too.
Become a savvy spender: Everyone has areas in their life where they can save money. For example, maybe your family only uses the car on weekends but you take the whole family on vacation once a year. Or maybe you only go out for dinner once a month but your partner loves to go out for drinks every night.
Track your spending
Tracking your spending is a great way to stay on top of your finances. It allows you to see how much you’re spending every month — and if you’re spending more than you earn.
This will help you identify areas where you can cut back and save money for a rainy day, which will hopefully come sooner than later. There are plenty of apps that can help you track your spending, including the ones mentioned above.
You might also find it helpful to look over your last few bank statements to see where you can start cutting back in areas such as your cell phone bill or Netflix subscription.
Show, don’t just tell
This might seem like a no-brainer, but many people — especially men — fall into the trap of not showing their partners how they feel.
That’s why it’s so important to talk about your feelings and express how you feel. Sometimes, men just need to hear “I love you” and “I’m sorry.”
You can also try not talking about money for a while to see if that makes you feel any better. The key is to be honest with yourself and try to identify what you are feeling.
Summing up
Budgeting isn’t just about money — it’s about making sure that your money is being used the best way possible. That’s why it’s important to do your research, track your spending, and show your partner how you feel.