Looking for simple but effective budgeting tips for you to enable you better manage your finances?
A lot of our activities as humans revolve around money.
This means that having a good knowledge of how to manage funds has a stake in determining the quality of life we lead.
Here are simple budgeting tips to better manage your finance, every mum should know.
1. Have A (Written) Budget.
It is important that you keep track of your monthly spending, and have a written note of where your money is going. Make a budget and do your best to stick to it.
Add up how much you need to spend on rent, food, transportation, utilities, and other expenses.
Break your budget down into categories to see where you’re spending the most money and if you’re not pleased with the results, consider ways that you could make more money or spend less.
Identify what things aren’t essential for you and your child/ren, cut them off, or replace then with cheaper alternatives.
Shopping second-hand items, greatly reducing the number of times you eat out, disciplining yourself to quit impulse buying, etc. are great ways of ensuring you’re spending less.
When you make your monthly budget, take out your savings first, and leave out a little sum for unexpected costs, like car repairs, house maintenance, etc.
Build an “emergency fund” to cover 6 months of expenses in case you aren’t able to work or lose your job. This stash will ensure that you have time to get back on your feet without having to worry about money during those months.
2. Create A Savings Goal
The technique of having a savings goal you’re working towards is a tested and true hack for budgeting.
Create a budget based on the savings goal you want to achieve, to serve as a road map of sorts. Without it would be like hoping unto a car without a destination in mind.
When you do this, ensure that your budget and savings goal is as simple as need be.
No need to overcomplicate things or start creating complex and confusing spreadsheets with tables and formulas. This explains why many cringe at the idea of having to create a budget in the first place.
And certainly, no economics or accounting degree needed here; basic math should serve you well. Start with the one thing that you most want to accomplish when you reach your savings goal, e.g. rent, renovation, a new car, etc.
Having a savings objective will help you stay focused and on the right path to managing your finances.
3. Be realistic, Mama. Don’t Overdo It
An important budgeting tip for managing your finances is to make your budget realistic.
A lot of people who take drastic actions in the attempt of reaching their goal often end up not reaching it.
Ideas like spending only 10% of your income and putting the rest 90% into saving; eating only eba and soup, isn’t good for anyone.
Moderation is the best policy. Have realistic and attainable goals in the short-term — such as reducing the number of times you eat out every month. Now, that’s a more attainable goal.
4. Talk Budgeting With The Immediate Members Of Your House
Learning about budgeting tips and how to better manage your finances isn’t a talk exclusive to you alone.
At least, it shouldn’t be. Do your best to get your spouse and the children involved by having regular family budget talks.
Depending on the age and development level of your kids, you’ll know whether to spill the frizzy details of your income or expenses.
The focus here is: you going over the basics of spending and saving.
Besides, what children learn about money when they’re younger can come in handy later when they move out/raising families of their own.
5. Keep Celebrations Simple
For birthdays, holidays, and similar celebrations, it will help you to make the emphasis be on making memories, in place of spending money.
Explore some low-cost activities like spending the day at the beach, doing the cooking and baking yourself, taking advantage of discounts/promos, (especially now that Christmas is around the corner), and so on.
Get more tips on finance management for mums here.