Budgeting is a highly important skill that we never outgrow and that can be difficult, but it’s important to take the time and make sure that you get your finances in order.
In today’s world, budgeting needs to be more than just “hitting the minimum amount to pay your bills”. In today’s world, budgeting needs to be an intentional process of being mindful of how much money you spend on certain things and when to spend it.
Reasons why budgeting matters:
– to ensure you have enough money to pay bills on time without incurring late fees
– to avoid accumulating debt that can lead to bankruptcies
– to provide for necessary needs like medical emergencies and emergencies like natural disasters
– Making sure you are living within your means
– Helping you save money in the long term by planning ahead and tracking progress
– Find bad spending habits like impulse purchases
-Stop you from overpaying for services
– Helps you keep up with large credit card bills
– It helps stay on track with your savings goals
– It makes sure that you save an exact specific amount every month
– It helps with debt repayment
– Spend your money in a way that’s smart and maximise your return
The importance of conscious spending:
The first thing you should do when trying to take control of your finances and save is to start spending consciously. You would have heard this phrase a lot, but it is the first step towards financial success. Conscious spending starts with self-awareness, which means knowing what your true needs are and prioritising them. It also includes setting financial goals and tracking your progress against them on a regular basis.
These steps will help you create a budget and make more informed decisions about how much you spend every month. Once you have a budget in place, it will allow you to save more money while staying within your monthly income.
This is a concept that proposes that you need not spend all the money on items that you want but instead spend it on what matters most to you like experiences and relationships; or on services like health care, education, and financial freedom.
Conscious spending is all about using your money wisely and making sure it is going towards meaningful purchases that help you build a better future for yourself.
How to start spending consciously:
One way of getting yourself introduced to conscious spending could be by setting a day of the week where you only use cash to pay for anything and not swiping your card or using Apple Pay. The idea of looking into your pocket for cash and counting coins sometimes to buy what you want will make you more conscious about spending rather than quickly swiping your money away in various shops and stores.
You can also set a day of the week where you try to spend nothing at all and see how possible that would be. You can set another day of the week, where you do not go over a specific daily budget and watch how much savings you would accumulate this way. You can then spend that money later on things that matter more than silly items or impulsive purchases the money was gonna get spent on.
It is important to not go overboard with this and start becoming extremely cheap to the point where you lose sight of other things that matter in life. Click here for our article on how being cheap can stop you from enjoying you short life journey.
How technology helps with budgeting:
Today, people are living more and more on their mobile devices. Many apps have been developed to help them manage their finances better, with only the use of their phones and digital devices.
The best way to use these tools is to find the budgeting app that’s right for you. Use this app to keep track of your income, expenses and net worth as well as create budgets for your monthly, quarterly and annual goals.
Digital technology has made it easier to get a bird’s-eye view of your finances and have the ability to make strategic and informed decisions that will help you manage your money better.
Managing your finances can be overwhelming and tedious sometimes, so it’s important to use these tools and online apps correctly for a more organised approach to your finances.
Examples of apps that help with budgeting:
Managing your finances is easy with technology now. The right data paired with the right algorithm can be used to create a budget that works for you. You will also be able to see how you are spending your money and get a better sense of where to cut back for extra cash.
There are many apps out there that can help you do this – from budgeting apps like Mint or Personal Capital to credit cards that track your spending and reward you back.
There are also other ways that you can use technology for managing your finances better. One way is through investing in an app, such as Acorns or Robinhood, that allow you to invest small amounts of money on a recurring basis. Another way is through working with a company like Betterment, which offers an automated investment plan.
The use of technology for budgeting is no longer just in a company’s toolbox. It is now available to individuals so they can manage their finances better. Virtual assistants, accountants and mobile apps have made it possible for people to keep track of their expenses online
However, it is important to remember that these apps should only be used as a guideline and not something to rely on too heavily. They are not suggestions from a personal finance expert. So if you’re financially struggling a better thing to do would be talking to your financial advisor or going to a professional for help.