Learning how to stretch your household budget is a process. There are literally thousands of different ways to save, but only some of them will make good sense for your family. It takes the ability to accurately assess your priorities, as well as where your money is currently going, in order to make big changes without feeling broke.
Here are three steps you can take to comfortably rehab your household budget:
1. Track your spending.
People have struggled to balance their bank accounts ever since debit cards became popular. There’s too much pressure to swipe your card, grab your bags and get out of the way as fast as possible to write anything down in the moment. On the way to the car, there are many things that can take your mind off your finances as well. It’s normal these days to forget a transaction here or there, but those forgotten transactions can make a big impact.
There are certain apps, like Mint, which make the process much easier. These allow you to snap a quick picture of your receipt. How different applications treat this information can vary. Some attempt to categorize your expenses while others allow for you to make your own notations. In doing so, these tools can help you track your expenses.
If you really want to get down to the nitty-gritty, however, you have to make a commitment to write down whenever you spend, and you should spend money during these times just as you always do. If you catch a burger on the way home from work or grab a morning coffee, make sure you continue to do those things. Cleaning up your act during the budget assessment won’t help you do anything but be extra frustrated when it comes time to cutting your expenses later.
2. Identify your impulses.
Many people get defensive at this point and say, “I bought it because I needed it.” Try to expand on those thoughts. Why did you need it? Why did you select that particular item? There are no wrong or right answers here. Only honest ones. It is impossible to change your spending habits unless you’re able to accurately define them.
This step can be embarrassing. Realizing your random stops at Dairy Queen have become a daily ritual or seeing how often you buy a new pair of jeans can be sobering. Don’t be surprised if you find at least one charge you think is a mistake. It might be, but it’s just as likely for someone to miss how much money would be better saved for more important things. That said, even some of these embarrassing expenditures are habits you don’t really want to quit. The next step is crucial if you want to cut money from your budget without feeling the pinch.
3. Set your priorities.
Now you know how you’re spending your money, and you know why. The question is, “Are your purchases fulfilling your goals?” If you take your friends out every Wednesday, is it bringing you closer or are you starting to feel taken for granted? Is that gym membership keeping you healthy? Are you putting your frequently purchased art supplies to good use? So often, we make purchases for the wrong reasons, and instead of fulfilling our goals, the lack of income becomes an obstacle. It’s important to make sure all of your purchases are put to best use. If what you’re spending money on now doesn’t do that, look at alternatives.
Be specific. Ask yourself, “If I don’t have a gym membership to the swank place across town, what can I do to feel like I’ve made my health a real priority?” Brainstorm several different ideas and then select more affordable options. In the end, a high-quality pair of sneakers and a new jogging routine can be just as effective for your self-esteem, and because you’re actually putting thoughts into action, they’re also better for your body. As long as you’re fulfilling those desires, you will feel satisfied regardless of the amount you’re spending.
It can take time and practice to learn how to stretch your household budget. It’s a process that takes time to get right.
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