Trying to save a few bucks on these everyday purchases may cost more in the long run.
Maintain a personal budget that helps you save money and avoid debt
Build a personal budget that helps you control overspending that leads to credit card debt.Personal budgeting tends to get a bad rap. In the past, it was a time-consuming hassle that most people would prefer to avoid. However, today’s technology, such as smartphone budgeting apps, make it easy to budget so it can become part of your daily routine. The more you stick to a budget, the easier it is to save money and manage debt. It also helps you avoid issues that lead to financial hardship. The articles in this section are geared towards helping you learn how to build and maintain an effective personal budget. You can find more tips at the bottom of this page.
Donating to a fake charity won’t help anyone but the scamster in charge.
If your emergency savings is on a permanent fast, maybe it’s time to plump it up.
Headed to the ATM to help out a friend down on his luck? Read this first.
Don’t risk roughing up a good friendship with these dangerous financial moves.
Watch for these signs that it’s time to tweak your current budget to make it work.
Socking away savings is painless – and maybe even fun – with these online apps.
Is FOMO (fear of missing out) causing you to take more risks – financial and otherwise – during the pandemic?
From small things (utility bills) to big things (banking), Americans will earn and spend differently long after the pandemic ends
From shifting spending habits to retirement and homeownership goals, the pandemic has changed many Americans’ financial outlook.
Don’t move to your dream metropolis before checking whether you can afford life in the big city.
Some are speaking up. Some don’t want to. None feel they should have to. But all agree that racial inequality isn’t just a moral problem. It’s a financial problem, too.
Looking for ways to reach your financial goals faster? Small town life could be the answer.
To err is human. But you can avoid catastrophe by heeding others’ advice.
Are your emotions sabotaging your finances? Here’s what you can do to rein them back in.
These big daddies of music all had something to say about money.
Here are the things Americans are filling their shopping carts with most while social distancing.
Is your cart spilling over due to coronavirus anxiety? Try these tips for overspending immunity.
When you need money fast, don’t fall prey to easy options that can worsen financial troubles.
The Budget Mom’s methods saved Tiffany from her credit card debt. Then, she got to meet her.
Don’t ask for a loan from those you love before reading these tips for a better outcome.
Feeling uncertain about how to handle your money or investments during the coronavirus pandemic?
Tiffany Aliche is known as the “Budgetnista” for a reason.
Now that your refrigerator is packed for self-quarantine, don’t let all that food go to waste.
Here’s how to get back to being frugal.
From home repair to assistance with utilities, help is out there if you know where to look.
Don’t miss out on what this health crisis teaches you about personal finance.
Without workplace distractions, you can probably find more time to devote to money matters.
No matter how you paid for your toilet-paper backup, you just encountered a scary number of germs
That toilet paper stockpile won’t save you if you don’t have enough money to pay your mortgage.
Give them the best but walk the talk about the value of money.
These 10 tips can save you tens of thousands of dollars over time.
The generation is working and earning. Here’s where their money goes.
Here’s how to stop your host from changing the locks two days into your stay.
Discouraged by your financial life? Money Girl’s four-part system will help you simplify your personal finances and do more with your money.
You can save big on a large purchase with a 0% interest offer – unless you pay more in the long run.
A new survey gets to the heart of spending habits and relationship-killing money turnoffs.
Here’s why some pharmacy purchases are a prescription for overspending.
A huge following formed around #debtfreecommunity on social media, and together, members are fighting money taboos – and their own personal debts.
These women are leading the way to a debt-free lifestyle. Here’s how they’re doing it.
Acting as a caregiver for Care of Mom or Dad may seem like the right thing to do. But can you afford it?
Don’t let these money-saving strategies exact a price from your budget.
Don’t get whiskered away by a furry face before tallying the costs of pet ownership.
Here’s how to recognize a freeloader before they move in, borrow money and mess up your life.
Hold onto that hard-earned money so you can enjoy more of what life offers.
Before you hit the road, make sure you know all the costs of owning a recreational vehicle.
Are you missing out on a big-bucks bonus? Here’s how to score some free extra cash.
Are you spending enough on cigarettes over a lifetime to buy a beach house?
The last thing you need after a divorce is to cry over additional debt. Here’s how to keep costs down.
Tired of chipping away at debt a few dollars at a time? Here’s how to knock out debt in record time.
8 Tips for Effective Budgeting
#1: Find a platform that fits your lifestyle
The biggest roadblock in budgeting is finding a tool that makes it easy to budget. Pen and paper or spreadsheet budgeting are rarely effective because they don’t integrate easily into your daily life. But a smartphone app is easy to check every day.
So, the best budgeting tip we can offer is to find a platform that fits seamlessly with your lifestyle.
- First check with your bank or credit union – you may have a budgeting tool already integrated with your checking account.
- Look in your app store to find free budgeting apps
- If you’re concerned about security, you can opt for desktop software, although this option is rarely free
#2: Recognize that budgets are not set in stone
One of the biggest mistakes that people make when they budget is that they set up a budget, then leave it be. Budgets are not set in stone! They are constantly changing, based on your income, needs and wants. Recognizing this means that you give yourself more flexibility. You set targets that you aim for, instead of defining concrete numbers that you can’t deviate from.
Always remember, a budget is really just a recommended spending guide. It helps you stay on track. But if you color outside your budget lines every once in a while, that’s okay!
#3: Set targets to control your spending
Whether you use an app with built-in categories or you make a budget from scratch, always make sure to set spending targets. These help you keep flexible and discretionary expenses under control so you can avoid overspending.
Flexible expenses are necessary expenses that don’t have a set cost (as opposed to fixed expenses, that have set costs). Discretionary expenses are all your wants, whether they have fixed or variable costs.
In both cases, you should set spending limits for each category of expense that you have. For instance, you set a food budget of $100 per week or $400 per month.
#4: Use alerts to your advantage
Most budgeting tools that are popular today offer alerts. They track spending and alert you whenever you approach a spending target. This helps you keep your spending under control. The alerts are usually sent via email, text message or through on-screen notifications if you use an app.
Using these alerts helps you stay on target without depending on you to check the app every day. Instead, your budgeting tool will tell you when it’s time to check in and adjust your spending.
#5: Pad your budget with free cash flow
Your budget should always balance your expenses versus your income. But that doesn’t mean that every dollar should be accounted for as an expense. If you spend exactly what you earn, you haven’t built an effective budget. Instead, you’ve built a strategy that ensures you’re always going to live paycheck to paycheck.
Instead of budgeting down to your last dollar, you need to leave yourself some breathing room. Ideally, you should only spend about 75% of what you bring in each month. That extra 25% is called “free cash flow.” This is basically money that you use to cover those unexpected expenses that inevitably come up each month.
#6: Savings is not free cash flow
Another big mistake that people make when budgeting is treating free cash flow as savings. You basically decide to save whatever you have leftover at the end of each month. This is a sure way to ensure you never save anything.
Instead, savings should be treated like a fixed expense. You decide how much you can afford to save each month – ideally, between five and ten percent of your income. Then you set this as a fixed expense in your budget. It’s like a bill that you pay yourself every month.
This keeps saving separate from free cash flow. You have money to cover all those unexpected expenses, but you also save consistently.
#7: Adjust your budget at least every six months
As we pointed out above, your budget should not be set in stone. Anytime you have a change in income or a new recurring expense, you need to revisit your budget.
But in addition, you also should make seasonal budget adjustments. Expenses from summer to winter vary widely. For instance, your electric bill could vary by up to $100 or more, depending on where you live. You can’t just decide to use less energy and leave your family freezing in the winter, so you need to adjust the target.
This also allows you to build in money for seasonal costs, such as a back to school budget in the summer and holiday budget in the winter. The more accurately you track these seasonal cost, the easier it will be to control your spending.
#8: Make sure to keep needs and wants separate
With budgeting apps, this usually involves customizing your categories. Most budgeting tools categorize transactions automatically. But the categories may blend needs and wants that are better kept separate.
For example, most applications auto-categorize food purchases. So, all your grocery store and restaurant purchases are lumped in together. But that isn’t a fully effective way of budgeting because it blends a need and want together.
Groceries are a need because you need food to survive. By contrast, eating out is a luxury – it costs more and should be curtailed when you’re worried about overspending. With that in mind, you should customize your app to split food into two categories: groceries and dining out.
This allows you to have one food budget that necessary (and fairly constant) and another for treating yourself and family. This also makes it easier to cut back when things get tight.