4 Ways to Stay “On Top” of Your Personal Finances
Raise your hand if you’ve ever made an excuse to get out of tackling your personal finances. In today’s busy world where we’re pulled in what feels like a million different directions, it’s incredibly easy to let budgeting and goal-setting slide. It’s tempting to push it off for another day—”I’ll get around to it when I have more time this weekend,” etc. Another reason many people lose touch with their personal finances is because it’s daunting to get started.
The good news is that you can stay on top of your personal finances without a huge commitment. And you don’t need to be a finance expert to manage your money effectively, either. Here are four ways to help you get started.
Make Budgeting Part of Your Routine
Overwhelmed at the thought of sitting down and going through your pile of balances, receipts, account statements and pay stubs? Take a deep breath. The key to sticking with it is creating a routine that allows you to manage your money without becoming so overwhelmed you want to quit.
Instead of treating budgeting like a chore to hurry through, try to optimize your conditions so it’s as painless as possible. Everyone’s ideal routine is different. If you’re a morning person, you may find it best to brew a pot of coffee and catch up on your finances early in the day. If you’re a night owl, burning the midnight oil may work better for you.
Set aside regular, manageable chunks of time every week or two rather than cramming hours of budgeting into a single day. Make it a natural part of your life rather than an obligation you dread.
Switch to a Mostly “Cash Diet”
Cash is a great way to limit spending because when you run out, you’re cut off from buying anything further. It also tends to make spending feel more real because you’re actually touching paper.
Start by taking out a set amount of cash each week based on what your budget allows by category. Let’s say you spend about $160 each week on groceries, but you’d like to trim that amount down so you can contribute more toward savings. By taking out $150 in cash at the start of the week, you’ll limit how much you can spend—helping you shop more mindfully and avoid impulse splurges.
Use an App to Track Spending and Saving
When it comes to personal finance, simpler is always better. Many people find it helpful to use an app with a free budget planner like Clarity Money. Budgeting apps help keep users up to date, allowing them to track goals and progress on the go. In an increasingly paperless world, more people are harnessing their mobile devices as money management tools.
Reward Yourself for Meeting Money Goals
The point of budgeting may be to curb spending so you can boost savings, but it’s still important to reward yourself for your efforts every once in a while. Treating yourself for sticking to your budget and hitting your goals is a great way to stay motivated.
Rather than thinking of rewarding yourself as cheating or splurging—which brings up “bad” connotations—treat them like non-negotiable perks you’ve earned through your hard work. Set aside a small amount of discretionary income when you do your budget, earmarking it for rewards. This way, you can indulge healthily without breaking the bank.
One writer for The Muse outlines how she indulged while living on a very limited budget abroad: Although most of her groceries were cheap staples, she’d make sure to buy one special item a week, like a “really good bar of European chocolate.” Then, she’d eat a square each day after work. This helped her enjoy her experience without spending more money than she had.
These four strategies will help you stay on top of your personal finances while keeping stride with your busy life.