So you love shopping, buying gifts, eating out, renovating your home,
and just splurging. There’s nothing wrong with that, right? Just as they say: “No one
can tell you what you want to do with your money”. I was pretty much like that until my life changed.
When you have more than just yourself to be responsible for, for example,
when you have a family with kids, or when you have a business to manage,
you inevitably will have to start budgeting. You will have to start keeping track of your spending,
think about the best ways to save and invest. And generally, set limits for yourself.
Today I will share my best 10 tips on how to budget your money.
Hi! I'm Anastasia of Anastasiablogger.com and on this channel, I share my online business tips
and all the ways that can help you make more money. If it sounds interesting, you know the
buttons to click, don't you? :) So let's jump into the tips!
11. Don't use "bad" debt and profit from the "good" debt
What I mean by the "bad" debt is credit cards with high interest rates.
But if it makes sense for your personal and family situation,
make sure that you use the "good" debt - we are talking about a mortgage with a low interest rate.
In this case, you'll be paying this debt over a long period of time, maybe 20 or 30 years.
And with a high inflation rate, which is currently at about 7% in the US, you are getting the full
amount of money you need for the house now. In 20 or 30 years, because of inflation, the same amount
of dollars will be worth a lot less. Plus, as a result of inflation, the price of your house in
20 years will be probably twice higher. I can tell you even more shocking numbers. It can cost twice
more money even in just 5 years from now. That's what happened with our apartment. We bought it
with a 40-year mortgage in 2018 for a fair price, and we invested about $20,000 USD in a renovation.
The apartment was spacious enough for our family of 3 but still, during the pandemic,
as most of the people, we were spending way more time at home than we were used to.
And we felt it would be really great to move into a house and have some outdoor space.
The problem was everyone else also wanted to buy a house during the pandemic, so it was hard to find
any good properties on the market and the prices also skyrocketed in just a matter of months.
We also were worried that it would be harder to sell our apartment for a good price because we
assumed everyone preferred to buy houses. Well, we were wrong because not everyone
can afford a mortgage for a house, so a lot of families were just looking for
bigger apartments to have a spare bedroom and use it as a home office.
Our apartment was sold on the first day of visits, we had two potential buyers so
we chose the one who was able to close the deal faster. The biggest surprise was that
even though we listed the apartment for double the price compared to what we paid for it just
4 years ago, it was still below the average market price. That's why we managed to sell it in a day.
I gave you all these details to show how sometimes a good debt can be really good and can actually
make you a huge profit in a matter of a few years. 10. Set automatic savings withdrawals
Set automatic savings withdrawals that will happen each month with the same amount. No
matter how strong is your intention to save money, for most people, there is always something that
comes up (like seasonal sales on clothes or a new smartphone model). Something will always tempt you
to spend. If you set in your bank account to do automatic savings withdrawals to an account that
you never touch and don't even look at it, you avoid the temptation to spend that extra money
on things that you don't really need. Hey, did you find any of these tips
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9. Create a Separate Savings Account Create a separate savings account and don't
use it for daily purchases. Even better, each time you deposit money in it, completely forget that
you own that account. Treat that savings account as your personal piggy bank which you only use for
emergencies. This will help you save money wisely. On a side note, with the high inflation rates we
are facing now, and with interest rates close to 0 and even negative for savings
accounts in some countries, keeping your money in traditional banks actually means losing money.
If you want to keep the money for savings out of your sight and out of your reach while allowing
it to grow over time, you might consider long-term investments in the stock market or
even in cryptocurrencies. These are investments that you don't want to touch for at least 5 years
or more. You could also check BlockFi which pays you a 9% interest per year which is far
more than you can get in any traditional bank in the US or in most of the European countries.
I'll give you a link to BlockFi in the description below this video, check it out there!
8. Plan for Your Taxes If you run a small business,
as a new entrepreneur, you might not expect to get hit by a large tax bill at the end of the year.
I don't how corporate taxes work in your country but chances are that you are not paying taxes as
a business on a monthly basis and the taxes are not automatically deducted from your account,
you will have to pay them yourself. In some countries, you might be paying
business taxes quarterly which makes it easier to keep track of your taxes. But if you can only pay
yearly, you really need to keep in mind the taxes you'll have to pay and have the money
required for the tax bill in your bank account. Make sure your business expenses don't eat up the
money you should have kept to pay taxes. In some countries, it can be a very substantial amount,
maybe about 20 or 30% of your annual revenue or even higher. But you definitely should
check this with your accountant because corporate tax is different in every country.
7. Negotiate! If there’s even a slight
opening for you to negotiate a price, take it. Negotiating a discount when you purchase something
expensive will help you greatly. For example, if you move to a new house, you might need to
buy many home electronics at the same time. You can totally negotiate for a discount and
you'll be surprised to find out that even large stores like BestBuy can often give you a very
reasonable discount price. You just need to ask! If you use a lot of subscription-based services,
check the pricing plans. In most cases, you can get a good discount if you pay annually. And
even if they don't offer an annual plan on their pricing page, try to reach out to their support
and ask directly if there is any way you could pay for 12 months upfront and if there would be any
discount for this. Again, you will be surprised to know that most businesses will prefer to give you
at least a small discount and have you locked on their service for a year. It's a win-win for you
as a client and for them as a business. 6. Track Your Spending
The best way to track your spending is to keep a record of it on your phone with some app,
for example, Mint, or list it down in a notebook. It's a good idea to keep track of your expenses
and categorize it so you know where you can make changes. You'll be able to see
what you're spending the most money on and where you'll be able to save the most money.
A helpful tip to track your spending wisely is to make two separate lists:
List of all your fixed expenses such as rent, mortgage, bills, utilities,
and other fees that you can't reduce much List all your other expenses (groceries,
leisure, shopping, etc) and other fees you can control and cut back on.
5. Set Specific Financial Goals Answer yourself these questions. Why
are you saving money? Why do you need to budget? Setting goals and reasons
why you need to save money is a great way to keep you on track and disciplined when handling money.
The clearer and more specific the goal is, the better! So you won’t have any room for excuses.
An example would be setting a specific amount of money saved for the week or month. I also
suggest setting a spending limit which will be a great help for you in the long run.
4. Create a Grocery / Spending List Another great way to help you with
budgeting is by creating a grocery or spending list. This method will help you know which items
you actually need more and which are not necessary. If you have items that you want
to buy but are really not that needed, then you can always set it to your “To-buy” list
or “wishlist” if you ever have extra money. Another smart way is to meal plan in advance.
List what foods and ingredients you need, buy in bulk, meal prep in advance, and you won’t have
to worry about your food for the next few days. And when you go to a grocery store,
with a list of products that you need, you will have fewer distractions and temptations.
3. Use Cash and Keep Your Change If you are on a budget, I recommend buying things
in cash. Why? There are two benefits to this: one, psychologically when you give away your physical
money, your brain processes it better and you feel stronger "the pain" of spending it. When you swipe
up your credit card, the transaction happens virtually and you don't see how your wallet is
getting thinner. And two when you pay in cash, you will be able to keep and save your change!
I suggest getting a piggy bank or storage with a lock for your money. Give the key to your family
member you trust and open it when it is full. You will be surprised at how much you have saved just
from the change in your pocket. 2. Repurpose and Recycle
Here’s a little motto I use in my everyday life: “If it still can be used, don’t throw it away”. As
a DIY person myself, I save tons of money just by repurposing or recycling old furniture, clothing,
and other materials instead of buying something new every time. This will not only save me money,
but will also help me contribute to the environment and boost my creativity.
Doing some DIY projects like this is also a great activity to do with your kids and loved ones!
1. Have Multiple Sources Of Income If you think that saving money is not enough
and you are looking for ways how to make money, then having multiple sources of income would be
beneficial for you. Start looking for side hustles that will help you have passive income - which is
money you can make even while sleeping! This could be a Youtube account, a blog,
selling an online course, a digital eCommerce store, and so much more! You can also take on
high-paying part-time or freelance jobs. I have talked about it a lot on this channel,
I'll link some of the videos in the info icon and in the description below.
I hope that these suggestions on how to budget your money wisely will help you in the
long run. And if you have more ideas or your own techniques in budgeting, then I would love to hear
it in the comment section below :) Now, before you close this page,
I linked for you some of my best videos that will help you make money online,
check them out here and there! And I will see you in the next one!