This is an article “Avoid These Savings-Killing Habits Now” by Marc Primo
Saying that most people aren’t into making budgets is an understatement. Aren’t mobile apps precisely for those tedious tasks? Not everyone may realize this, but from balancing numbers to auditing your expenses, doing your budget haphazardly can do some serious damage to your savings plan.
Properly doing your personal budget takes more than just hoarding all your pennies and quarters in your piggy banks and recording how much you’ve deposited. Companies have financial teams that do various budget sheets to track and monitor each and every spend and return; you can also see how budgeting works on your payslips which makes it clear that these tasks are quite important. Later on, you’ll see how reviewing your payslips will also matter in how you manage your savings, especially if you’re dealing with a mortgage, monthly rent, and household expenses.
However, sticking to a budget sheet is more challenging than creating one. It’s so easy to get lost in the various expenses, loans, and utility bills that vary from period to period that you’ll need to have some sort of a playbook to avoid the most potential savings-killers many of us encounter.
Worry not as here is a detailed guide to help you stick with your budget and meet your savings goals easily:
Monitoring your money
One of the most common budget-killers most of us encounter has something to do with the failure to track expenses. Failing to maintain your budgets on a regular basis or committing mistakes in your accounting columns could deem your sheet useless, so you’re going to have to carefully track where every cent goes with the help of reliable mobile apps.
Managing your expenses via e-wallets is one good way to monitor your financial activities as they automatically record and generate logs that make it easier for you to track your daily or monthly expenses. Whether you are dealing with your credit card purchases or bank accounts, you can easily link them to your e-wallets and list down all your receivables, payables, accruals, and more, accordingly. Aside from enjoying easy access to your transaction data, you can also use scheduling tools for your money transfers and bill payments so you won’t miss them and incur any interest.
E-wallets also allow you to set up alert prompts to prevent you from overspending your budget for shopping or groceries and help you stick to your savings plan. Finding the right mobile budgeting apps can streamline the way you handle your money. You get a higher level of security for your financial information, provided that you use all the app’s security protocols and sign up for regular notifications regarding system upgrades and the like.
Discipline always matters
Now that you have the tool, what you’ll need now and most importantly is discipline. Knowing that creating a budget and sticking to it will set you up with financial limitations, so be ready to lessen or say goodbye to some non-essential expenses that you enjoy such as shopping, acquiring collectibles, or attending social events.
Being dedicated to your personal budget can also be taxing, considering how much of your hard-earned money goes to paying off your loans and monthly bills while you sacrifice leisure time and enjoyment for a couple of bucks on your savings column. However, carefully taking a closer look at your payslips may help you come up with workarounds.
Some people commit the mistake of looking at their payslips as regular numbers that they can grab on a monthly basis, failing to see that these figures vary from time to time. Instead of being able to earn and set aside a few dollars from certain accrued benefits or compensation, this amount goes to other columns within the monthly budget.
Review your payslips so you’ll know when you can expect a higher salary depending on the number of days in a month’s work (e.g. February has the highest per cut-off as compared to months with 30 days), or when you are due for personal loan graduations or night differentials. This way, you can adjust what you receive and still allot the right amounts for the other columns.
Keeping up with your budget doesn’t necessarily mean you’ll have to deprive yourself of some fun. Add a column to your ledger for extra money earned and use that to reward yourself. All it takes is a little sacrifice and discipline to get some enjoyment out of saving money. When your extra money column increases after a few months, you’ll get the satisfaction of having some spare for socials, while staying on track with your target goals.
Beating a savings deadlock
Most people create budget sheets for important long-term reasons such as settling loans, acquiring a mortgage, or saving up for retirement. Sticking to a budget helps keep our money and lifestyle in check for realistic savings goals. Remember, it isn’t unusual to encounter the common problem wherein it seems like our savings amount is caught in a deadlock due to certain adjustments in expenses or loans.
Don’t give up on your budget if you hit a bump or get sidetracked if the progress seems slower because it can happen. When the pandemic hit, many of us had to dip into our savings jar for everyday expenses. Some even had to resort to taking out loans they couldn't pay immediately. But now that the economy is slowly getting back on track, we can finally regain our savings momentum by focusing on the financial obligations we need to settle before going back to look at our savings column. This makes it easier for you to set realistic goals than suffer chronic instances of debt.
What you need to do to beat the deadlock is to re-evaluate your budget and cut down wherever possible--be it food expenses, subscriptions, or transportation (now that remote work is more common). Try to find other sources of passive income so that once you’ve settled your debt from your active income, you can allot more for your savings.
Being aware of the common savings-killers we experience while on a budget helps us control what we spend and save in different circumstances. The real secret is learning how to go with how the current economy flows, getting the right financial tools that can make things easier, and approaching your savings plan with a positive attitude as you go on your way towards your savings target.