Does the idea of creating a budget make you cringe? It really doesn’t sound like a lot of fun, and sticking to a budget sounds even worse. But when you start getting into your financial plan, you might find that there are more reasons to rejoice than you initially thought.
Budgets aren’t inherently boring. They are simply plans. And, yes, you have to plan to pay bills. But guess what? You can also plan to have fun.
So, let’s get started.
Put it on Autopilot
There are some things you’re going to have to track manually, and you’re going to have to pay close attention to what’s coming in and what’s going out. But there are tools you can use to help make budgeting a more seamless process.
For example, you can use an app like Mint to help you see what you’re currently spending money on to figure out where to even begin budgeting. Not only will you need a good picture of your income and bills, but you’re also going to need to get a handle on how much you spend on things like clothing and entertainment.
And unless you’re already living beyond your means, this doesn’t have to mean cutting back.
Automate Your Savings Plan
Unfortunately, more than half of Americans report having less than $1,000 in their savings accounts. So if you aren’t currently saving money, you definitely aren’t alone. But that doesn’t mean it’s a path you want to stay on. Most experts recommend having three to six months of money to cover emergency expenses in your savings account, so it’s a good idea to start beefing this up.
The good news is that there are tools you can use to automate your savings, so you don’t feel the pinch quite as much. Your bank may even have a program to help you round up your purchases to the next dollar amount and put that extra money into savings.
So, how much should you put away? Twenty percent of your income is a good rule of thumb, but this is going to depend on your debt-to-income ratio. If your ratio is high, you may only be able to save 10 percent. But remember that this is better than nothing and you can always increase the percentage later.
Go through your expenses with a fine-tooth comb. When you get down to it, you’ll probably find that very few of your expenses are actually necessities.
Things like rent, utilities and car payments are necessities. And if you have debt, you’ll consider those bills a necessity too.
But everything else is optional. This doesn’t mean you need to cut the unnecessary expenses, but you’re going to want to prioritize them in terms of what they’re offering you. You may find that you’re paying for things you didn’t even know you were paying for.
We all sign up for naturally forgettable memberships and subscriptions that keep on running even if they’ve slipped your mind. It’s human nature. You might even have packages on subscription with Amazon that you’ve forgotten about and don’t need. These are things that can easily be cut from your spending. And when you cut these things, you can find more money in your budget to have fun and enjoy your life.
You may also find that you’re spending a surprising amount of money on alcohol every month. If this happens, you can look for ways to have fun without alcohol. As you might have guessed, this “fun” is exorbitantly expensive and managing to cut back will be a quick way to start balancing your budget
This sifting and sorting process isn’t about losing things that are unnecessary. It’s about spending money more deliberately, so you can make more out of the resources you already have.
Look for Discounts
Once you have a good handle on your expenses, you may find opportunities to get the same enjoyment out of something that’s less expensive. For example, let’s say you take an exercise class every day, but the membership is $120 every month. You enjoy everything about it, but there are similar classes that are half the price.
Even if it’s only a temporary change, you may want to choose the cheaper class as you’re getting a handle on your finances. You can always look for discounts on sites like Groupon and Living Social.
And if all else fails, you may want to look for a higher-paying job. There are plenty of fun jobs that pay well, so you can have fun at work, and make more money to have more fun at home. Although this isn’t the easiest option, finding a job that you enjoy and pays you more definitely alleviates some financial stress off your back.