Budgeting is perceived to be dull and the opposite of enjoying life. But done right, budgeting can actually be fun and, at the same time, life-changing. Knowing how and where to spend your hard-earned cash can make all the difference between retiring early and retiring late or paying your bills on time or filing for bankruptcy. Here's six tips to get your finances in order while maintaining a fun and fulfilling lifestyle:
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Use a Budgeting App
Budgeting apps are a prevalent niche in app stores for Android and Apple devices. Third-party review blogs and news websites, such as Forbes and NY Times, are a good starting point for finding trusted and effective budgeting apps. Most of them are free, but others charge a one-time or monthly fee for premium services and features. At the very least, budgeting apps will help you manage your personal finances with ease, categorizing expenses and even automating recurring payments. By removing most of the legwork, users are more inclined to continue budgeting and being more proactive when it comes to where their money goes.
Without motivation, you can't continue to do something that you don't really want to be doing in the first place. Not only does this apply to budgeting, but also other activities in your day-to-day routine. People aren't really excited to go to the dentist, and yet they do their annual visits because they are motivated by oral health. Find out what motivates you to save money and use it as a guiding force when it gets difficult to follow through your plan.
Use Financial Products to Your Advantage
While loans are considered bad for your personal finances and should be avoided at all costs, they can be helpful in certain cases. For instance, you can use auto title loans to repay another loan that carries higher interest rates. This is a technique called debt consolidation, and is ideal for people with multiple outstanding loans. It'll make it easier to manage and repay them all while also bringing down the interest rates you are being charged with.
Make it a Competition
Buddy up with a family member or friend who also wants to take control of their finances. Turn budgeting into a competitive game by setting weekly or monthly milestones for you and your buddy. For instance, see who can spend the lowest amount on groceries every week or who has more savings tucked into their pillow case after every month. The more people you involve in, the greater the stakes for bragging rights are, so make sure to invite your entire circle of family, friends, and coworkers.
Acknowledge Your Progress
Sometimes, what takes the fun out of an activity is the failure to acknowledge small but powerful improvements. Whether you cut your monthly grocery expenses by $20 or was able to go an entire week without ordering food in, acknowledge these small habitual changes. You cannot expect to completely change your lifestyle overnight. Making yourself go cold turkey will lead to a weak foundation from which to continue your newfound budgeting goals.
Don't kid yourself into thinking that the only reward you need is the reward of accomplishing the budgeting goals you set out to do. Sure, it's a reward in and of itself, but rewarding yourself with something as simple as a pint of your favorite ice cream or a movie night with friends can serve as validation that you did something good. Moreover, it reinvigorates you with more energy and momentum to keep things going.
Budgeting is undoubtedly one of the most valuable things we can do for ourselves and for our families. In a time when consumption is at an all-time high, with online subscriptions and two-day deliveries spoiling people left and right, having a solid budget will protect you from overspending and allow you to retire much earlier than most people.