Life is full of temptations, yet financial success revolves around making wise decisions with every penny you make. Most homeowners simply allocate money to various household expenses, balance each category, and then keep track of how many dollars are left at the month end. There are a few tricks, however, when maintaining a healthy household budget. This ensures that you are saving enough for the future while also having leftover money for various small splurges.
Here are four simple strategies for “cheating” your budget without breaking your financial goals:
1. Try including a small spending allowance each month and include it in your monthly budget
Start with including a line item in your budget, say $100 each month. Use this amount for a weekly coffee treat at the office or dinner with your friends. In the same way, you also can choose to set aside $200 a month and spend it on hobbies or recreational activities you’re passionate about. Make sure when deciding on the amount, you have enough to not dip into your debt repayment or retirement savings.
2. Make day-to-day choices and allow yourself to use the spending excess next month
Try to wind up with leftover money. For example, you budgeted $600 for food. This month, you didn’t eat out as budgeted and spent only $500 on food. That leaves you $100 left over which you can now use for splurging or for other purposes.
A piece of advice: Before you decide to spend your leftover money on splurging, make sure to spend any overages on any categories where you may be short or overextended.
3. Be flexible in budgeting in the areas where you like to spend more
Suppose you love gourmet foods and wine. You may spend a lot of money in this category, however; you need to then to be generally pretty tight in the other categories. You can accommodate your love of food and wine into your budget by simply adding more money to your food budget while budgeting the other areas tightly. By applying this strategy in your budgeting life, you now should be able to enjoy a bottle of wine and steak once every few weeks without shattering your budgeting goals.
4. Explore nonfinancial ways to splurge
Give yourself the sense that you have a joyful life. Simple “splurge” by making better use of your time. Instead of playing video games all evening, cut back to an hour and spend that time on a task you would normally do during the weekend. Then, when the weekend rolls around, spend evenings playing with your kids, go for a run, or maybe pick up a book you had laying around the house that you wanted to read. These “time perks” are completely free and won’t hamper your monthly budget.
We know that it only takes a few tweaks and a little knowledge to get your budgeting life on track. Budgeting is a powerful tool and you should educate yourself on how to best utilize the hard money you make. Should you have any problems handling your finances or need budgeting advice, please visit our website at www.unitedcounselors.org.
Also, check our blog “Month by Month Guide” to manage your finances.