Do you want to save or budget your money better this year?
One of the top ten resolutions Americans will set this year includes saving money. In today's post we're giving you 5 tips on how to save money and create a successful budget to help you succeed in your financial goals. Follow along below for our 5 tips on how to handle your money better this year.
Understand Where Your Money Goes
Having a budget helps you see how much money you spend each month, and more importantly, where you’re spending it. Making a budget will help you understand where your money goes, because when you create a budget you have to think about all your expenses for the month. Here are a few basic categories that you can build your budget off of:
- Personal Spending
Keep Track of Your Transactions
Consider setting a time aside each week or month to track your transactions. For example, you may open up your banking app and browse through your transactions from the past month. Add the sum of each time you went out to eat, and see if it matches your budgeted amount for eating out. Keeping track of your transactions can help you identify habits you may not be aware of, which can help you be wiser in your spending.
See Income and Spending Trends
Are there some months of the year that you spend more money (the holidays)? Do you receive a raise or a bonus every year? Recognizing and anticipating trends in increased or decreased income or spending can help prepare you to create a well-informed budget. The more you prepare and are self-aware of your trends, the more secure you can feel throughout the year.
Reflect on Your Relationship with Money
Money can cause a great deal of stress in life and relationships. Reflecting on your relationship with money and what role it plays in your life may help you budget it better in 2020. For example, if someone has a very limited amount of income, money can become an obsession. To relieve stress about money, consider re-framing the role that money has in your life. Instead of making the equation “More Money = Happiness”, try to make the following equation true: “Happiness = Up to Me”.
Manage Your Budget Regularly & Be Kind to Yourself
It can be difficult to develop a new skill, especially when you have little experience in that area. Don’t be too hard on yourself if you spend more than intended, it’s important to be kind to yourself and keep trying. The key part in that sentence, is keep trying! Keeping track of transactions and making adjustments to your budget is necessary to keep your budget alive. Because we spend money every day, your budget should be a living document and should be monitored and used regularly.