We all have bills and financial obligations of some sort. Even if you’re not out living on your own, you have to travel, eat, and clothe yourself. And unless you’ve hit the lottery, you are probably limited in the amount of funds to go around.
Budgets are amazing tools. They give you visibility in how you are managing your money and where it might be wise to cut back. At the beginning of every month, I take a look at how well I did last month and what I might want to change for the upcoming month.
During this process of reflection and planning, I inevitably come to a point where I wish I had just a little more to go around. So, I try to apply creativity to my budget when possible and find ways to stretch it just a little bit further.
Here are three tips I’ve developed over many years of budgeting that take a creative approach to keep my budget in check, while still enjoying life:
Expenses Don’t Remain Constant
Some of your bills probably are fairly consistent (rent/mortgage, cable/internet, car payments, etc.), but many are not. How much you spend on eating out, clothing, and even heat and cooling will vary from month-to-month. If you find that one month is going to be heavy on cooling, that’s the time to start managing your money well by moving things around and reducing the amount of money spent on eating out for example.
This doesn’t mean that in the fall that your budgeted amount has to remain the same, though. Many people get stuck in the rut of only reviewing their budgets once a year and not taking into account any seasonal variations or special occasions. Looking at these expenses more regularly can lead to insights into where you can become better at managing your money.
Share the Burden
If you live with someone, either a roommate or significant other, there are probably some areas that you can address together to save money. Perhaps you can share groceries and buy in bulk, rather than having two of the same things. Another way would be to see if there are any overlaps in other areas such as renter’s insurance or gym memberships. There are often discounts for adding someone to an existing plan, rather than opening a whole new account.
Managing your money isn’t limited to people who live together. If you are friends with your neighbors, even just going shopping at the same time can save on transportation costs. And if you head to a warehouse store and buy 18 rolls of paper towels, split them in half when you get home and pay for your share. It will be much cheaper than if you buy them in the local supermarket.
Re-evaluate Wants and Needs
We use the word “need” more often than we probably should. We don’t need a lot of things that we say we do. Instead, we want them. Taking a second look at expenses and really making the distinction between wants and needs can help point out areas for improvement. On top of that, prioritizing “wants” can also help in identifying areas for adjustment.
Let’s say you really want that new car, but you also want to go on that two-week-long vacation with your friends next year. You could save up for one, but not both. While traveling in comfort to and from work might be high on your list of wants, is it worth missing out on that trip? Maybe, but maybe not. That’s where your priorities come into play, and the decisions that you make should reflect that.
Perhaps, there’s a creative way to get both of your “wants”. Maybe cutting the vacation down to a week, and finding a used car with a little more mileage on it might be enough to get you both of what you want, without sacrificing too much.
Money is a key part of your life, so don’t be afraid to get creative with managing your money. If all you do is the same thing day in and day out, you will find that while you’re meeting your financial obligations, you may not be living your life to the fullest.