The word “budgeting” usually conjures up images of people tightening their belts and using coupons for purchases. For many, the idea of implementing family budgeting tactics is a cringe-worthy experience. It never sounds good when you have to organize how and where you spend money.
Below are four ways on how you can budget to boost your happiness.
- Reducing Your Fixed Needs Expenses
Maybe you have realized that you need a big house to accommodate your growing family, or you need a new cell phone because the old one requires a replacement. The amount of money you will be spending on these needs is more flexible that you may realize. To reduce your fixed needs, watch out for opportunities where you can save even more.
You could consider signing up for a card that offers you 3 percent back on gas or groceries and you will suddenly reduce your fixed expenses by a 3-percent margin. You may consider teaming up in a joint family plan for the phone and your phone payments may plummet by as much as 50 percent. In addition, consider switching your account to an online savings option and you will receive 1 percent interest that you may plow back for use in other things.
- Reducing Your Fixed Wants Expenditure
Knock off that daily latte, cable and other fixed expenses, and you’ll free up thousands of dollars a year. True, cutting your monthly dose of internet movies will sting at first; but in time, you’ll adjust. Moreover, your wallet will thank you at the end of the year.
For example, if you are in the habit of purchasing gallons of juice every time you go grocery shopping, you could instead invest in the same flavor but in a concentrated form. All you need is to add water and you get the same type of juice you were enjoying before. When you discover that, the fancy juice is what you want and not need, you can save a substantial amount of money in the end.
- Employ Strategy On Variable Expenses
Your variable needs are those unavoidable expenses that may come up on a regular basis and the best way to manage such is by maintaining some emergency savings or purchasing different forms of insurance. For Americans, insurance is a legal mandate required for vehicles, homes and even life. Such policies could easily end up costing you thousands of dollars, if not hundreds, a year.
To strategically spend on your variable needs, find out more about your work insurance coverage and fill the gaps with your own policies. Open a savings account and send automatic monthly contributions until you have at least six to four month’s worth of living expenses saved for handling emergencies; also, families looking for relief from debt can get help from experts. When the unexpected occurs, try paying for it up front.
- Keep More Money Aside For Variable Wants
Your variables are the most efficient means of increasing your family’s quality of life and happiness. Consider your variable wants as annual expenses that are much, much cheaper compared to fixed wants. For example, you could be frugal on housing expenses but splurge on other expenses such as a family holiday that will cost you about the same amount as a year’s worth of cable TV.
You could also pay for something up front that you will receive over time; for example, seasons pass to a ski resort or an amusement park. Spend money on experiences such as the occasional fancy date, vacations, surprise gifts or even a fun birthday party. Consider also spending on meaningful things like donating to a favorite school or charity.