Between work, chores, your kids, and everything else, you don’t enjoy a lot of downtime in your day-to-day life. Chances are when you do finally get an hour alone, you don’t want to waste it by going over your finances. You’d much rather spend it catching it up on Altered Carbon, taking a bath, or playing Settlers of Catan with your family. While any of those would be more fun than pouring over your finances, none of them holds the same financial importance. Though you may hate to do it, making a budget is one of the most important things you can do with your money. Once you’re ready to bite the bullet and spend the time you need to make a budget, keep these three tips in mind.
Don’t shelve your budget.
There’s a lot of hard work that goes into your budget. You have to tally your expenses, categorize your purchases, and figure how much you spend in comparison to what you earn. After all that number crunching, you probably don’t want to do it anytime soon. So you shelve your budget, hoping to forget about your terrible experience behind the calculator.
This defeats the purpose of your budget. It’s supposed to help guide your spending as you tackle challenges in your life. If you keep the same budget you made in your 30s — a time when you were single, renting, and just starting your career — it won’t have the same impact when your 50 — a time when you have a family, own a home, and are thinking about retirement.
A successful budget is one that’s reworked regularly. If nothing big changes in your life, you don’t have to check in with this document every week; every year should be good enough. But if something big does happen, you need to revisit your budget sooner. Serious things like buying a home, losing a job, or the need to travel the world are reason enough to redo your budget, but so are less significant things, like buying an Galaxy Note 8 or updating an inefficient furnace.
Prepare for the emergencies.
Often people realize they need a budget when two things happen. One, they’re facing a mountain of debt and they aren’t sure how to fix it. Two, they have big goals for the future and want to make sure they have the money to achieve them. While these are two important reasons to start budgeting, they aren’t the only ones.
A budget’s there so you can be prepared for the unexpected. Make sure there’s enough room for an emergency fund in your budget on top of your goals. This emergency fund can help you should financial disaster hit, giving you the ability to cover surprise household bills and repairs without worry.
Until you can build a considerable emergency fund, you may not be able to handle unexpected bills or repairs on your own. A personal loan is a great financial tool to help you make up the difference between your budding fund and your next emergency.
Use your budget to find the best rates
Whether you’re looking for a line of credit or a payday loan, you need to know your financial abilities before you lock into any personal loan. No two products are the same, and each will have different terms, conditions, and rates. You can use your budget to help you figure out what kind of conditions and rates you can afford, so you don’t sink further into debt by getting assistance.
Figure out the sort of cash you have on hand, so you know the size and frequency of payments you can realistically match without overextending yourself. Once you have those numbers in mind, you can search for the best assistance for your situation. Whether that’s a payday loan or something else entirely, your budget can help you find the best one.
Finding what works for your situation is why you created a budget in the first place. If you’re ready to start saving better than ever before, devote some of your precious spare time towards making a budget. Though it may not feel like it at first, it’s time well spent.
