Budgeting is a cornerstone of personal finance management. Knowing how to track your expenses and budget based on your income and goals is imperative for long-term financial success. Both veteran budgeters and people new to budgeting can always benefit from evaluating where their money is going. For example, magazine subscriptions may only cost $10 per year. But if you have five magazines coming in the mail each month, that is $50 per year. While $50 per year doesnt sound like a lot, it doesnt take long to add up to $100, $150, and more over the years. Read on for five tips to maximize your savings.
Cut Recurring Expenses
Subscriptions and other recurring expenses are some of the worst budget busters because they sneak in silently each month to drain your bank account. Like magazine subscriptions, even the smallest recurring expenses add up quickly over time to be a larger expense.
For a bigger win, look at expensive cable TV and other entertainment packages. Cutting your cable and keeping internet and streaming can save you a small fortune. If you pay $70 per month for cable, that is $840 per year or $4,200 over five years. That is serious money to sit on the couch and do nothing!
Evaluate Your Phone Plan
Phone companies charge an arm and a leg for cell phone service these days. Did you know there are tons of other options that may provide the same level of service at a much lower cost?
Project Fi from Google is a newer mobile phone service provider that can save compared to the likes of Verizon and AT&T. Project Fi plans cost $20 per month plus $10 per gigabyte of data with no hidden charges, for just a few bucks per month in taxes – which is much easier on your monthly budget.
Prepaid plans and smaller carriers like Republic Wireless can also offer huge cost savings depending on how you plan to use your smartphone.
Check up on Your Insurance
Get organized around your different types of insurance. Sometimes simply changing insurance companies (car or home insurance for example) can help you save significantly each month and make your budgeting a breeze. Theres no guarantee of course, but learning more about your insurance options and costs cant hurt.
If you have been with the same insurance company for years and are tired of seeing your bill go up each month, search for a quote to see how much you can save. Quotes are free and they only take a few minutes.
Automated Budget Trackers
Entering your budget into a spreadsheet takes time each month. Why waste it when there are budgeting tools that manage everything for you? These financial trackers link to your bank account and automatically aggregate and categorize your spending.
- Mint – Focus on budget and spending tracking
- Personal Capital – Focus on investments in useful budgeting tools
Mint is the long-time veteran of this product set. Owned by Intuit (of Quicken and Quickbooks fame), Mint updates your accounts daily, tracks your spending against your budget, and sends you weekly updates and reminders to help you stay on track.
If you prefer a little more personal input, check out You Need a Budget, or YNAB, which helps you assign every dollar you earn a job – whether that is paying living expenses, investing for retirement, or paying down your debt.
Cut What You Don’t Value
The most important budgeting tip does not involve fancy tools or calculators. It involves your decisions. Keeping up with the Joness can leave you broke and unhappy, so dont make any financial decisions based on other people, only what you value most.
If your thing is travel, make a big budget item for travel, but try to find something you can cut to pay for it. Whether that is cable TV, daily restaurant visits, or expensive weekends at the local bar, find something you do that isnt a top priority and sucks up a lot of your hard-earned income.
Stop spending on what you dont value, and focus your spending on what you care about most. Everyone has a passion, and it is okay to spend on that passion as long as you are not in debt and can afford your have to bills first. As long as your essentials are covered and you are saving for retirement each month, you can spend guilt-free on your favorite passions. Just make sure youre not wasting on something you dont really use or care about.
Don’t Blame Others
Fixing your budget is up to you and you alone. It is easy to point your fingers at an employer or something outside of your control to explain away financial woes, but the blame game doesnt help you or anyone else. Take ownership of your budget and spending, set aside a little time to manage your finances each week, and put yourself on a path to personal finance success with these budgeting tips.