We all know how important creating a budget is… (at least I hope we do). Even though I spent years thinking budgeting was only for people who couldn’t manage their money, I now know the power of creating a budget and how you can make simple tweaks to your budget to help you save more money.
Yes, more money!
That’s more cash in your pocket without having to cut your budget down further, without having to give up the things you love, and without having to start all over again.
Because the big secret is… budgets are meant to be fun!
Gah, yeah, I said it.
They’re not meant to be restrictive, they’re actually meant to help you have everything you want without wasting money.
When you change your understanding of why you budget from being in a place of lack, ie: I budget because I don’t have enough money, to a place of abundance, ie: I budget so I can use my money to buy what I want and achieve my financial goals, it changes so much about how you handle your money.
That being said, there are some practical things you can do, small tweaks if you will, that can help you first of all stick to your budget so you save money that way, as well as using your budget in a more controlled way.
At the end of the day, you are in charge of your money, you are in charge of your budget, and you can make it all work for you.
These are some simple tweaks you can make to your budget to help you save even more money.
1 – Don’t Undercut Yourself
This one sounds simple, right? You already know this. But did you know that it can be easy to accidentally undercut yourself in certain areas of your budget because you don’t think about the consequences long term?
For example, if you typically give yourself $300 to spend on groceries each month and suddenly drop that down to $200 one month, you’re going to seriously feel the effect it has on your budget.
In order to make sure you stick to your budget, I highly recommend figuring out how much money is in each spending category and then add 10% for a buffer zone.
For example, if groceries usually cost $300 a month, giving yourself $330 would help make sure you don’t run out of money in the grocery category and after a month or two, when your habits are established and it’s easy to keep track of how much you typically spend, you can lower that 10% down to 5%.
Alternatively, you can keep building up a buffer in there which will help you be able to buy items in bulk in the future to save more or be able to put money aside for holiday seasons and times when we tend to spend a little more on food.
2 – Be Sure To Include Spending Money
Did you know that having $0 written up in the spending money category is the quickest way to run out of money?
It seems counterintuitive to have ‘include spending money’ as a way to save more money, but I promise, it’s true.
Generally speaking, people who don’t have spending money will end up using their grocery budget, or pull from their savings, for convenience items because there is something they want or need to buy, but they don’t have the money budgeted for it.
“But I want to be able to save as much money as possible, not waste it on unnecessary things!” you might say.
Yes, saving is great, but having a little spending money means you can buy yourself something nice once in a while without feeling guilty about it… which will, in turn, make you happier.
Plus it will help prevent you from going crazy and buying a bunch of stuff because there’s no money for anything else.
You can also use this as your “treat yo self” fund so to speak. Treat yourself whenever you want but be sure to have a little spending money saved up for those times that you really need it.
You’re more likely to actually stick with your budget longer if you account for things like spending money for yourself, and sticking to your budget means achieving your financial goals and saving more money.
3 – Create A New Budget For Each Pay Cycle
As someone who worked shift work and never had two paychecks that were the same, I can attest that there is a whole lot of power in creating a new budget for each pay cycle.
Before you scroll past this because you tell yourself it’s too much work, takes too much time, or doesn’t apply to you because your pay check is always the same, hold up a second.
This isn’t just for those who have fluctuating pays, this is because rarely do we ever have the exact same expenses each and every pay cycle.
Think about what you have upcoming over the next month.
Any events you need to go to (entertainment budget), birthdays you need to buy for (birthday presents come from what part of your budget?), travel you need to do (where do travel expenses come from?), school excursions (again… where does this get accounted for…?).
Not budgeting for each item that is coming up is a surefire way to burn through your savings.
As much as we would love to be able to stick to a lean budget, that only works if we don’t have any other commitments, which is rare.
Instead, simply look ahead at what you have coming up and add to your budget accordingly.
Yes, it might mean that you put less in your savings that particular pay cycle, but it means you won’t draw from your savings either (which is a bad habit to have when trying to save money).
4 – Grocery Shop Online
This might not be the case for you, and if it isn’t that’s great! Save yourself some time and skip this one.
However, if grocery shopping online is an option that works for your budget and schedule, then I highly recommend doing so.
Groceries can be one of the biggest expenses in our budget and is also one of the ones that is easiest to overspend on.
I find that having a set budget gives me the freedom of knowing exactly how much I can spend on food, and that means less time wandering around the grocery store trying to decide if this or that is worth the price.
Oftentimes when you shop online there are extra discounts or coupons you can use too to save even more money.
We have two main grocery chains where I live so I have a tab open on my computer for each store and I search for the items on my grocery list on each site – I then buy it from whoever has it cheaper.
I also find that by grocery shopping online I’m more likely to stick to my shopping list (that I made when I was meal planning, another bonus tip for saving tons of money), and not buy random things because I’m hungry (surely I’m not the only one that does this…).
5 – Automate Your Bills
Yes, I know… every article on frugal living includes this, but it is one of the best ways to save money but so many people resist it.
Having your bills automated can free up so much of your time, and here’s why…
I literally never have to think about whether or not my bills are getting paid. Ever. They’re paid on autopilot every single time.
I never have to worry about a late payment fee. I always get early payment discounts. And I never have to worry about whether or not I will have enough money to cover the payment.
And it’s so easy to do:
1 – Set up a new bank account that is only for your bills.
2 – Work out your yearly cost for ALL of your bills, all utilities, all of your rent/mortgage, loan payments, subscriptions, phone, car servicing… everything.
3 – Divide your total yearly cost by the number of pay cycles you have in a year. If you get paid weekly, that’s 52, if you get paid monthly, then divide it by 12.
4 – Whatever that amount comes to is the amount you need to put into your bills account every pay cycle in order to cover your bills. I often add 10% to this to help build up a buffer.
5 – Set all of your bills to come out of this account automatically.
6 – Sit back and enjoy never having to worry about your bills again.
It does take a little time to set up, but that time is nothing in comparison to the amount of time you will save not having to worry about your bills. It also means you save money because you don’t have to worry about late payments and some providers offer discounts for early payments too.
By making a few simple tweaks to your budget, you can end up saving so much more money in the long run. It doesn’t have to take a whole lot of time, you don’t have to cut your budget right back (in fact, most of these points were the opposite of this) and you can be in even more control of your money and your financial situation.