Successful budgeting takes plenty of foresight and a disciplined approach. Even if you’re doing everything right, it can still be difficult to reach your goals each month.
Typically, when we overextend our budget, it’s for extra items we didn’t plan on — anything from a takeout meal to a hair appointment, little expenses can add up fast and throw you off track.
We’ve got simple tips to help you plan for extra expenses and make sure your budget can handle them. With this guide, you’ll be able to anticipate uncommon purchases and create room in your budget for them. You’ll never have to sweat a purchase again with these tricks!
Margin of error
When creating a zero-base budget, it’s important to leave yourself some wiggle room each month. Some people like to take their monthly budget and set ten percent aside as an emergency fund. This doesn’t mean you have to spend those extra funds each month, and not touching it is a fast way to grow your savings.
Whether you’re worried about an increase in utility costs or want a fresh haircut and clothes for a new job, you’ll have peace of mind setting aside money for unexpected expenses each month. While ten percent is a great starting goal, any amount you can save will help lessen the burden during an emergency.
You should be anticipating some surprises when creating your budget, and it can make a world of difference when the unexpected strikes. Adding a small percentage to your monthly gas bill can help you save up for preventive maintenance on your vehicle. While you should be budgeting for quarterly oil changes, saving extra funds for things like brake repair can help during stressful times.
Save your remainders
Zero-base budgeting should account for every penny you bring in, but just because it’s budgeted doesn’t mean it has to be spent. Consider setting up a savings account and make monthly deposits any time you stay under your budgeting goal.
Savings accounts are a valuable tool and will make the road to your financial goals smoother. Watching a savings account grow creates an incentive to continue saving, and not having immediate access to the funds will help limit impulse purchases. Balances can easily be transferred in case of emergency, and some accounts will even pay you interest as you save.
Think it over
Impulse buying is one of the biggest obstacles for people trying to achieve financial freedom. One of the best ways to ensure you’ll always have the money for unexpected expenses is to dramatically reduce impulse purchases. Keeping more money in a savings account can help eliminate temptation, but the best way to slow down is to sleep on it.
If you’re tempted to make a big buy that isn’t necessary, take a day or two and weigh the pros and cons. While it’s important to reward yourself for progress, it only takes one expensive swipe to throw your plans off the rails. Consider alternatives, and if you still feel the item is necessary, try adding it to your budget and saving specifically for it before taking the plunge.
Reduce monthly obligations
It may seem obvious, but reducing your monthly expenses will open up room in your budget for extra purchases. If you’re frequently running out of money before the end of the month, try cutting out nonessential expenses like entertainment and dining out. Any amount you can save will give you more long-term security.
Money doesn’t have to be a stressful topic, and with planning and sacrifice, you can be prepared for whatever life throws at you each month. Give these tips a try to help strengthen your financial well-being and be ready for any unexpected expenses that come your way!
Finances FYI is presented by 1st Security Bank of Washington.
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