Managing a household budget is a task that sounds a lot simpler than it actually is. The problem with this lies in the fact that it gives people false confidence that they can handle tasks that they don’t know the first thing about. Now, given the fact that household budget management is something that millions of people do every month, it can’t really be that hard. However, running your budget and doing so efficiently are two different things. Here are five tips to help you get better at it.
Lists can help you with impulse buying
The first thing you want to do is use the advantage of living in a digital era. Imagine a scenario where you make a grocery list and then go to the store, only to realize that there are discounts and limited time offers on various items that you might need in the future. So, you decide to give in to the old habit of impulse buying only to realize (once you already reach the register) that you’ve, once again, spent much more than you intended. How do you fight this?
First of all, every supermarket has their own website nowadays, where they announce all of these discounts, sometimes before they even hit the shelves. Therefore, all you need to do is check this out while at home and compose a list with that in mind. Then, you let the list sit on the table overnight and revisit it in the morning, just before you go to the store. Now, you’ll be able to revise it with much clearer judgment and avoid making unnecessary purchases, without missing out on amazing opportunities that come from these special offers.
Download a budgeting app
The reason why a lot of people lose track of how much money they’re spending is due to the fact that noting or memorizing all of this tends to be somewhat inconvenient. With a budgeting app, you can do this in a much easier fashion and have the advantage of using all sorts of analytical tools that will give you a much greater insight into how you’re spending your money. A lot of people falsely believe that major expenses are the problem, yet, they’re wrong. Major expenses like rent, utility bill and even emergency repairs are fixed. It’s the accumulation of those smaller expenses that creates a major problem. With the right budgeting app, you can easily solve this problem once and for all.
Don’t dip into your 401K
When it comes to personal finance, and finance in general, you’ll often be forced to make tough decisions. Doing an easy thing at the moment might come to backfire in the future. The best example of this can be seen in a scenario where people dip into their 401K when faced with a shortage of money. After all, it’s your money and you’ll replenish it as soon as you’re back on your feet. Doing so, nonetheless, is a slippery slope and something that should be avoided at all cost. Instead, it’s often better to look for suitable personal loans that you can repay as soon as possible. Remember, this is not only for capital investments. You can take as little as $5,000 and pay it back in just 2 years.
Selling has never been easier
Decluttering your home and refilling your home may sound like a dream-come-true, however, it’s also something that’s never been easier. All you have to do is find a suitable platform or an app and start selling all the stuff you no longer need. People on eBay are willing to buy old CDs, cables and even used cardboard boxes. Keep in mind that these are items that you neither need nor use. In other words, selling them will feel like making money out of thin air. Other than this, it will keep your home cleaner and easier to organize in. Sure, this is an option that was always available, yet, never before was it so easy to pull it off. All you have to do is download an app on your phone, take a photo, set a price and write a description (even this is optional).
Start an emergency fund
Emergencies may seem as random and unforeseeable, however, the chance that you’ll have an emergency expense every year (at least a minor one) is, more or less, a fact. Why panic when this moment arrives, when you can start an emergency fund and use it to handle these situations in the best, most efficient way possible. You can either go the traditional way and save 10 or 20 percent of each salary (your net pay, of course) or you can gamify this experience and try to see where this will lead you. Either way, your household definitely needs an emergency fund and the sooner you make one the better.
At the end of the day, while the above-listed five items are important, they’re far from being everything there is you need to know about household budget management. Once you have a surplus, you might want to start investing, even diversifying your investments. This, nonetheless, is a story for another time.