Start 2021 with these budgeting hacks to get on top of your finances
Having a budget and sticking to it is at the heart of a healthy financial position ❤️
You're definitely off to a good start with me in your back pocket but here are my best budget hacks to take you to the next level and kick start the right habits ...🏆
✅ Work out your financial goals.
Having a reason to budget in the first place is a really good incentive to stick to it. And it's likely to motivate you to go the extra mile rather than just get by. So it might be something short-term like a holiday you have your eye on, or it might be saving for your kids (universities, weddings etc) or for your own retirement. See my dedicated Snoop which guides you through this process.
✅ Spend an hour or two really understanding your outgoings & income.
An hour or so in the grand scheme of things is not a big deal if it means being on top of your finances. Sit down (with your household if possible) and list all your outgoings and income for the year. Have me on hand to easily access your spending across ALL accounts. Don't just look at a snapshot of spending – include one-off payments like holidays, insurance policies or birthdays.
✅ Save for the big things across the year.
Tuck away money every month for the big annual spends, based on what you can afford. Don't spend what you think you should and then pay for it for the rest of the year. Save it into an account that you can't touch if possible – to keep it separate from your day-to-day spending.
✅ Never get around to saving?
It's so easy to let saving slip, and think 'next month'. But treat it as you would any other bill and budget for it properly – as a non-negotiable – to get you into the habit. Automate it with a standing order to make it easy.
✅ Consider an account just for bills.
If it helps you to split your bills out from your nice-to-haves, consider getting a separate account for your bills and salary. You can then 'pay yourself' into another account for fun money. There are even some current accounts that will pay cashback on big bills – for example the Santander 123 lite account. You can use me to keep a close eye on these different accounts.
✅ Try the 50 20 30 rule.
This is a rule of thumb popularised by American politician Elizabeth Warren. The idea is you allocate 50% of your income to needs, 20% to savings and 30% for wants. You could help yourself track this by allocating all 'want' transactions to the general category. This might not work if you have high living costs compared to your income, but it's worth a shot!
✅ Create a meal plan week by week.
Food can be a big spending category for many people (to check your transactions tap on 'View' in the top right of the home screen) and it's easy for it to creep up without you noticing. Meal planning can drastically reduce the amount you spend and also the amount of food you waste (great for the environment).
✅ Challenge yourself to no spend days.
Maybe your spending during lockdown has been low, or maybe you've been spending your way out of boredom. Either way, challenge yourself to go for a certain number of days without spending a penny (so to speak).
✅ Find a budget buddy.
Having a support network is always helpful when trying to crack a new habit and budgeting is no different. If you can find someone in the same boat as you, who's up for comparing notes and cheering you on, it may help you stay on the straight and narrow.
✅ Don't ignore your debts.
Budgeting can be tough if you're relying on credit cards or paying off mounting debt. There will be more on dealing with debts in my Planuary series. But you can get a head start by going to the money section in the browse tab for my tips on paying off debt quicker.
✅ Feeling brave? Get someone else to go through your budget.
It's hard to be objective about your own budget – what feels like a necessity to you, might not be. This isn't for the faint hearted but if you can bear to do it, having someone else look over your budget might highlight areas where you can significantly make inroads.
✅ Diarise time every month to go through your budget.
Stick an event in your diary, say every Saturday morning to go through your transactions. A quick check in every week, will help you feel on top of things.
That's it. 12 practical ways to budget.