Do you get to the end of the month feeling like you’ve just barely managed to scrape by? If you find yourself living paycheck to paycheck, know that you’re far from alone.
Living paycheck to paycheck is very stressful, and turning your financial situation around is easier said than done, but it’s certainly possible.
Not everyone is born an expert when it comes to budgeting. Becoming an expert at budgeting takes time, practice, and plenty of trial and error. If you’re new to budgeting, it may feel challenging to navigate early on.
However, by implementing the right budgeting strategies and hacks, you can level up your money management skills and save yourself time and money.
In this guide, we’ve compiled four simple yet effective budgeting hacks to help you make a difference in your bottom line and avoid paycheck-to-paycheck living.
Let’s begin!
1) Automate Your Savings
If you’re just starting on your journey to take back control of your finances, automating some of your financial tasks is one of the best things you can do.
By automating tasks, you can remove repetitive decision-making and free up your mental energy. You can also save time that would have otherwise been spent moving your money around manually.
From setting your bills to autopay to direct deposits, or automating your payments on short term loans, you can automate various aspects of your finances.
Paying yourself first is one of the best budgeting hacks to automate your savings. By paying yourself first, you eliminate the temptation to spend newly earned money by removing it from your area of spending entirely.
With this simple rearrangement of priorities, you can prioritise your saving goals and put your savings on autopilot.
2) Live Below Your Means
It’s not uncommon for many people to unknowingly or knowingly live beyond their means. While it may feel fulfilling in the moment, it’s not a sustainable lifestyle.
If you’re not already doing so, another great budgeting hack is aiming to live below your means. This means spending less than what you bring in. Living below your means and spending less than you make is a great way to free up money within your budget.
When you live below your means, if you get a bonus or pay raise, you would have to avoid increasing your spending. Instead, put this extra money towards paying down any debts or growing your savings. Seeking out coupons or discounts for items and services is an effective way to implement this lifestyle.
Living below your means ensures that you never go into debt to pay your bills and that you have a safety net during any financial emergencies.
3) Set Up Emergency Funds & Sinking Funds
How often have you made a solid money plan for the month only to be completely blindsided by an unexpected expense?
Whether it’s a forgotten birthday, emergency car repairs, or a surprise vet bill, unexpected expenses can quickly derail even well-planned budgets. This is where emergency funds and sinking funds come in to save the day.
Sinking funds are small amounts of money you save up over time for specific, predictable expenses or upcoming splurges. For example, say you plan to meet some of your friends who are visiting from out of town. Setting aside some extra money that month will give you more to spend while they’re around.
In comparison, emergency funds serve as a financial safety net and are set up to cover emergencies. It’s like self-insurance to ensure that if disaster strikes, it doesn’t impact your other financial plans.
This budgeting hack helps support your budget and manage your finances with more peace of mind.
4) Try Using a 50/30/20 Budget
There is no one “perfect” way to budget. There are many existing budgeting methods that you can use and, there’s nothing wrong with DIY-ing a budgeting method that works for you. We find that the 50/30/20 method is often one of the best beginner-friendly budgeting methods.
With the 50/30/20 budget method, allocate 50% of your income to your needs, 30% to your wants, and 20% to your savings. This budgeting technique helps you prioritise planning and saving for the future, no matter your income.
It also encourages you to spend on things that make you happy while keeping your living expenses under control. One of the best parts is that you can make it as simple or as complex as you want.
You could choose to subtract your expenses from these three main categories or create subcategories in your budget to hone in on your specific spending habits. With this flexibility, you can customise your budget to fit your financial situation and personal goals.
To Sum Up
When it comes to budgeting, you don’t need a complicated budget or plan to successfully save and achieve your financial goals. Nor do you need to rework your entire financial life and change directions overnight.
Budgeting hacks are quick and easy-to-implement tricks that help you manage money more responsibly and work towards a healthier financial future.
By keeping the above hacks in mind and being mindful of your spending, you can build your wealth, take back control of your finances, and avoid living paycheck-to-paycheck.