Usually, when someone gets a burst of inspiration to sort out their finances, they start by making a budget. When you really sit down and work out how much you actually spend in a month on certain items, you may start to panic. Why did I spend $300 this month eating out?! Why do I order products online so often? Did I really need more shoes? Budgeting really can hurt your feelings and make you realize that sometimes you’re a bit frivolous with your money. If it’s hard for you to budget, but you still want to save some money, try a couple of hacks that have worked for me.
- “Spare Change” investment apps. I have used Acorns for about a year now, and it has allowed me to save a few hundred dollars without even realizing it! It can invest the spare change from your debit and credit card purchases, or you can set a fixed amount of money to be withdrawn from your account every week. For me, every Monday, $15 goes straight into the market, and I don’t even miss it. Of course, there is a fee but it’s only $1 a month if you have less than $5,000 in your account. It’s simple, quick, and you can withdraw if you need it on rainy days. But beware that it may take a couple of days to get the money out.
- Instant withdrawals. It’s like the spare change apps, only more. Start by setting a goal for how much money you want to save a month. Then, set up a savings account and have them withdraw that amount at the beginning of every month, right when you get your paycheck. It’s a painless way to meet your goals, plus savings accounts earn interest, so you’re making more money just sitting there.
- Cash in a lockbox. This may be controversial because cash doesn’t make interest or grow, yadda yadda, but I have tried this and it works for me. I withdraw a little cash at the beginning of the month and lock it away in a little box hidden in my room. I can’t see it, so I mostly forget it exists. Cash in my pocket is spent instantly, but cash locked away is safe from my greedy impulses. Plus, if I ever need a quick buck, I know it’s there to save me. And there’s no pesky wait time for withdrawals … unless you can’t find your keys.
How to adhere to a budget
If you really want to follow a budget, first you have to be honest with yourself about what you’re buying and how much you’re spending. Take a look at your last three months of transactions and break it down into categories. Then, develop an attainable budget for each category. Secondly, be realistic about how much money you make and how much you want to save. If you know that after necessary payments, you can’t save more than $50 a month, that’s alright. But you also need to be realistic about how much you spend on things that aren’t necessary. If you’re saving up for something, you have to realize that sacrifices are necessary. You probably won’t be able to eat out/order in every night anymore. Lastly, be forgiving. We all make mistakes and give in to last-minute excursions with friends that cost a little more than we thought. It’s OK to fumble, as long as you get back up and stick to your plan.
To learn more about money management apps, check this out.