Once you decide you want to get a better handle on your finances, one of the steps you usually look at is a budget adjustment. This helps you take control of the actual funds that passes through your hands. It also allows you to monitor those that are being paid out for various debt obligations. This is because your budget should be able to control everything coming in and going out.
It sounds pretty easy but adjusting your budget remains to be one of the friction points for a lot of people. There are some who are having a hard time adjusting their household budget because they are working on a shoestring budget. Moving items up and down can be a problem as there is not much room to move expenses and income around.
In fact, USAToday.com cited that almost 70% of Americans do not even have $1,000 in their savings account. It would be easy to say that most are tucked away in long-term investments or tied up to assets. However, the point here is that most consumers would not have the funds to handle emergencies.
Apart from adjusting your budget while keeping the life you love, you also need to make sure that you are keeping yourself financially protected. This in part, helps you enjoy the life you want far longer with less financial stress on your shoulders. Here are a few things you can look into to help you accomplish just that.
Be on guard with lifestyle inflation
Time.com explains how the temptation to spend simply to keep up and impress other people is able to sneak up on you through technology. It talks about social media in particular and how you would see your network of friends seemingly living a good life. You need to understand that what you see on your feed are filtered posts and you rarely see behind the scenes.
That new car by your neighbor might come with a high-interest rate. That new house bought by a friend could have taken them years to save up for. You need to try and not keep up and rather, use those positive things you see on social media as inspiration. Inspiration to reach for your own dreams and work hard to make them happen.
With this, budget adjustment becomes your friend. Lifestyle inflation is the direct opposite of what you want to accomplish in adjusting your budget. You need to look for ways to cut down costs and not increase them. Spending them has to be strategic because they have to bring you closer to your goals and not pull you further away.
Evaluate your food budget
You also need to take a look at your food budget and pinpoint areas where you can make budget adjustments. The last thing you need is to sabotage your grocery budget. If love going out with friends and sharing a meal while catching up, you can still do this with a few tweaks. Why not explore doing it at home so you can save on food cost?
If you and your family love watching movies, consider streaming them and making your own popcorn and drinks at home. This helps you save gas going to and from the cinema, you can have family and friends over and save on food as well.
Review subscriptions can be part of your budget adjustment
We all want to continue living the life we love. This usually means it comes with its own set of expenses to maintain the life we want. With this, budget adjustment becomes a little harder for you have to give up certain aspects of your routine. However, you do not have to take on drastic measures to make this happen.
One thing you can do is to review your subscriptions and identify which ones you are no longer using. Do you really need Spotify, Tidal, and Pandora all on your phone? How about all those cable channels you don’t even get to watch? Those magazine subscriptions could be coming in and go straight to your drawers without being opened.
Take a look at what you can consolidate and those that you are no longer using. They might not amount to much on their own. However, combining them could free up a few hundred dollars. You can then use this to max out your 401(k), increase your reserve funds or even start a 529 plan for your children. The idea is to stick to what you need and trim down excess costs.
Be creative with transportation costs
You might be too focused on your car budget with plans of buying a new one. The odd thing about it is that you might yourself looking for ways not to use it that often. This again goes back to budget adjustment in hopes of regaining better control of your finances. The challenge is how to do that without sacrificing your love for driving or even your new ride?
One thing you can do is to consider carpooling with your officemates. This allows you to drive and use your car while cutting down the cost it takes to go to work every day. You might also want to consider getting in an exercise routine in there by taking a bike to and from work. You do not have to do it every day but alternating will not only cut your transportation cost but your body fat as well.
Start developing your hobbies
This might not sound connected with getting a handle on your finances and budget but there is a good reason in investing on your hobbies. You need to keep in mind that your aim is to monetize and eventually earn off of your hobbies. The idea here is to be able to transition from a job you are doing simply to earn money to doing something you love and earn money as well.
There is a good chance that between that two, you would choose to do something you love and earn money in the process. Take a look at your favorite sports superstars – they get to play the sport that they love and they get paid to do it. If you love photography, take small but calculated steps that will ultimately allow you to venture into photography as your go-to income generating hobby.
Manage debt payments
This is arguably one of the hardest tasks to accomplish when you are trying budget adjustment for your finances. There is a good chance that you have more than one debt payment and juggling all of them at the same time can lead to disaster. It can come in the form of missed payment due dates or send the wrong payment amount to one lender.
Consider taking out a debt consolidation loan to help you manage debt payments. This program streamlines your payment efforts and you worry about fewer details. As you combine multiple payments under one account, you no longer have to stress over multiple due dates and varying payment amounts. There is also a good chance that your monthly payment would go down as you stretch your repayment timeframe.
A budget adjustment might seem hard at first but there are ways to achieve this without leaving the life you love behind. You just have to adjust a few things here and there to free up funds to help you achieve your long-term financial goals faster.