When it comes to managing your financial life, not many get excited about the big, bad “B” word – budgeting, that is. The thought of budgeting feels like a massive burden on both your time and your energy, not only to create it but to maintain it, too. However, being able to stick with a budget based on your income and your expenses is paramount to your ongoing financial well-being.
Utilizing the following tips and tricks can give you the budgeting superpower you need to achieve the next step in your financial life:
Know Your Why.
Above all else, budgeting comes down to willpower. But just like any other new habits you try to form, it is necessary to understand the why behind your change in behavior first. Budgeting won’t do you much good if you haven’t yet taken the time to realize its overall benefits. Whether you’re trying to buy a home or other major purchase, save for retirement, pay down debt, or add to the number of travel experiences you have every year, you can’t feasibly reach your financial goals without knowing your money circumstances inside and out.
Creating a budget forces you to first take a long, hard look at the amount of money you have coming in and where that money goes each pay period or month. You have to know what you’re working with before you can come up with a plan to move forward. Once you recognize how your money is being spent, you can determine if there are places where you can cut back. Those cuts allow you to put your money to work in ways that benefit your overall financial situation and help you reach your goals for the short-, mid- and long-term.
Letting Tech Lend a Hand.
Generally speaking, technology is a beautiful thing. It allows us to have more control over our lives in a variety of ways, including managing finances in an intelligent way. If you’ve tried to create a budget in the past with an Excel spreadsheet or good ol’ pen and paper, you may find it easier to let technology do some of the heavy lifting for you.
Several tech-infused options are available to help with creating and monitoring your budget, including applications like Mint, You Need a Budget (YNAB), and Wally. While each has different features that may work well for one person more so than the next, they all have budgeting functionality which allows you to manually input income and spending, sync your bank accounts to automatically track purchases and categories, and of course, create and manage your budget with the simple click of a button.
Tapping into Your Resources.
It is not uncommon to start thinking about your journey toward budgeting when a major financial event has taken place. That could be overspending on credit, student loan management, or a new home purchase that’s put your cash flow into a bit of a pinch. When these things take place, you may have to dig deeper to figure out how your income will meet your expense needs.
If multiple debt obligations are is an issue for your budget, you may want to consider your options for consolidation. Reorganizing your debt under a long-term, fixed loan, or getting a cash infusion from a short-term lending vehicle may be the reset you need to get back on track with your budgeting goals. Consider each of your resources carefully, based on cost, added burden to your cash flow, and time of repayment before pulling the trigger.
Budgeting doesn’t have to be a bad word. Instead, you can utilize cash flow management as a way to achieve something bigger for your financial life. First, understand why a budget is necessary, and then enlist the help you need to stay on track. Think about the ways you can simplify your money situation with outside assistance, and you’ll be on your way toward your next financial goal before you know it.