Being better at budgeting isn’t just about knowing what to do, it’s about knowing what to do consistently, each month, week or year. It takes a continuous effort and knowledge on which positive actions lead to better budgeting, which should definitely be seen as a starting point. Here are several budgeting habits that you would do well to adopt in 2019. Some of them require an effort over the course of an entire year, so starting as early as possible is highly advised.
Start an emergency fund
The first thing you need to do in 2019 is to start an emergency fund. The amount of money in the fund needs to be somewhere between three and six months of your expenses, depending on your financial ability, at the moment. This will help you avoid the necessity to look for loans or dip into your 401K when an emergency strikes. Even if you don’t doubt the reliability of your employment or your current health, bad things happen from time to time. It’s much better to be prepared and never need this fund than to need it and not have it. If you find it too hard to set aside the money, why not start gamifying the process by embarking on a 52-weeks saving plan or use a similar technique.
Be realistic about your ability to cut expenses
Sure, having your thermostat one or two degrees down in the winter is a possibility that could save you quite a bit of money, yet, turning it off or tuning it down drastically shouldn’t be an option. When faced with a financial crisis, a lot of people overestimate their ability to save money, believing that they could save unrealistic amounts. Of course, you can cut down on luxuries, yet, are you really able (and willing) to completely forsake some of these guilty pleasures? Being financially down on luck is sure hard, yet, you shouldn’t live like a hermit. There are other ways to improve your financial state, so focus on finding them instead of just looking for expenses to cut.
Use online tools to sell your assets
If you decide to start selling, both major and minor assets in order to improve your current financial status, you can be much more effective at this by utilizing online tools. For instance, you can use eBay to declutter your home and earn some money, at the same time. There are people out there who are willing to pay for old cables and cardboard boxes, so why not use this fact to your benefit? For more valuable assets, on the other hand, you need to be a bit craftier and use a specialized platform. For instance, when I decided to sell my car online, I used the Carbiz platform for its beginner-friendliness, seeing as how I’ve never done something similar before.
Write everything down
Most importantly, you need to develop a habit of writing down all your expenses, even those that you consider one-time expenses. This will give you an ability to predict your future expenses with much greater accuracy and reliability, as well as help you do some basic analytics of your spending. The reason why some people still aren’t doing this is due to the fact that they believe this should be done with pen and paper. On the other hand, there are so many amazing budgeting apps, which means that you can enter every expense, from your grocery bill to your gas bill as soon as you pay for it. Due to the fact that this only requires your smartphone, that you always have on you, either way, this shouldn’t be that complex of an issue.
While some may believe that budgeting is a complex matter or that it requires too much of an effort, the truth is that it’s really not that hard. Investing a small amount of money, finding a user-friendly asset selling platform, downloading an app and being realistic about your finances is far easier than it sounds. Still, you won’t be able to know this for sure until you try.