A Sure Way to Make Every Single Penny of Your Savings Count

Let me guess…

You are also one of those people who go through the pain of carefully budgeting all their finances at the beginning of the month. But, half way through the month, things take a negative turn and you are stuck asking yourself how you got here.

Frankly speaking, money has a way of mysteriously disappearing. Almost everyone who works has had this feeling at one point or the other. It’s not like there are holes in our pocket so where all the case could be going?

Budgeting is a way of life and a smart one at that. Way better than living things to chance. It doesn’t matter whether you are a multi-billionaire or salary worker. It always helps to keep your daily, weekly and monthly expenditures in check.

And given the right measures, you can really prioritize and spend money on the things that matter the most. Though it might be tempting to splurge on that eye-popping leather jacket you can’t help but eye every day on your way home. The financial backlash might be too much to bear in the long run. However, given proper planning of your budget, you can save enough to buy just about anything you want.

It’s really just a matter of time.

After making bill payments and other necessary expenses you might be left with some amount of money. The question is what do you do with all that cash then? After all, you earned it. Most people spend it differently depending on their nature and taste.

In other to achieve the most of your paycheck and do more with the little you have, nothing can be left to chance. This is the point Zero-based budget comes into play.

As tradition will have it, most budgets include two basic columns. One is the income column and the other the expenditure column. Assuming for a minute you had $10 000 as your income and your expenditure for the month is $75 000. Then you are left with $25 000 without any obligations. Money you can blow. And most people blow.

Wrong move

Using the Zero-based budget, you follow through the saving processes of the traditional budget but just your left over got to be zero. Not $100, $50 but $0. Every penny down to the very last one will be accounted for. End of the budget.

I bet you wondering where the $25 000went, right?

That’s what to the Zero-based budget all is about. Using this budget type you are able to account for things you formally live to chance. Expenses like the gas refill and the latte you just can’t seem to do without. These all need to be accounted for. Then you allocate a huge chunk of the remaining cash as savings.

I know it sounds scary

But let’s not dwell on that. Rather let’s consider the benefits we will derive from this new and improved means of budgeting. For instance, what do you do when you get a flat tire and all that left over cash has been spent to the last dollar?  When you run out of groceries?  Or when that craving for a Subway just won’t go away. What do you do then?

Now I hope you beginning to see why you have to account for everything.

During the process of building your Zero-based budget, all normal and obligatory expenses have to be listed first. Car insurance, rent, transport fairs, etc. – all these form part of the fixed payment since they come due approximately at the same time every month.

Next, comes the list of long-term items such as annual vehicle inspections, medical checkups or property taxes. Maybe you are planning any big purchases, e.g. a new car. This can also be added to this list and the total costs broken into twelve equal portions.

But you just not there yet.

Now can an equally important section; miscellaneous money. So you allocate a fair amount for expenses you will make on movies, gas, coffee and what have you. I mean, you can even create your own category just in case there is something that can’t fit into any of the above-listed categories.

Finally, an emergency fund is added. This pop up unexpended and the wise person is prepared for anything. Occurrences like repairs, and flat tires will fall under till category.

It’s undeniable, small expenses like fast-food runs, $4 here $5 and before you even know it, you’ve eaten through $500 with really nothing to show for it.

I used to experience it all the time. Until I was taught the Zero-based budget. And it has totally transformed the way I handle my personal finance. Hope it will do you as much good as it did me. Please do ask any questions you may have in the comments section below.

Enjoys writing about the post-industrial revolution, personal finance and changes such as how job postings for employers can facilitate the much-needed change in today’s world.

Save Your Marriage with These Essential Finance Tips for Couples

Marriage is probably a frightening deal, to say the least! And when it comes to money, most couples end up untying that promising knot over a couple of financial issues. While the financial instability between couples if quite understandable, just rambling on the money matters is not enough.

To actually save your love life from going downhill with time, chuck the romantic talks for a moment and shift your focus to what’s more important to your spouse and you – financial management. You are a couple and there probably lies either a very harmonious or troublesome times ahead of your both. Becoming aware of the basic finance tips for couples is just a starter, while the entire main course actually depends on the chemistry that you have with your partner in managing your financial matters effortlessly. And without a doubt, that’s one of the toughest things to do after marriage!

So before you end up talking about children and insurances, it inadvisable to open up on the most driving force in marriages – finances. Financial management between couples can either help strengthen their bond over the years or build a gap in between two partners.

To carry on with going down the romantic line, here are some things to keep in mind while you’re sitting at the dinner table discussing finances with your spouse. And also, stay careful while you’re at it.

Talk the talk

Don’t take your spouse by a surprise with a sudden and typical couple financial discussion. Find a neutral time that fits just right for you both, and when you both are not really facing any current money issues. It is the ideal time to avoid any further arguments and clearly, plan out your financial plans as a couple. The goal is to have a calm and relaxed financial discussion with your partner first and get acquainted their monetary habits to gain a better understanding and insight into your financial stakes as a couple.

Avoid the blame game

Support is the key to any strong marriage, and that is also the card that you need to play while managing your finances. No finger-pointing! No blaming each other! And no argumentative denials or justification for any financial setbacks whatsoever. In a long-term relationship, both you and your partner have to meet in the middle and avoid the blame game that just ruins relationships. And blaming will not help you balance out your balance sheet either. Stay cautious about being more supportive and understanding instead of turning the tables around at each other.

Believe in equality

Neither you nor your spouse should ideally have an upper hand at anything. None of you both may be capable enough to fairly decide and judge the monetary habits of another. So the golden rule? Consider yourselves equal. Your working hours and heavy paycheck hardly determine anything when it comes to a sound financial management with your partner. Have an equal say in money management because regardless of the big fat or small slim paycheck, you need to respect the equality of each other as partners.

Avoiding the key mistakes

There are chances of you experiencing a wrong financial approach from your partner. Or even for you, it is important that you avoid-

  • Rushing with things. There should always be some level of autonomy, even when it comes to couple finances.
  • Assuming that clearing your partner’s debt is solely the responsibility and duty of your partner. Team efforts work wonders!
  • Thinking that your partner is the only spender in the family. Yes, both of you spend different amounts of different things, remember this!
  • Keeping money secrets from your partner. Transparency helps a lot, more than you’d expect!
  • Thinking that both are completely safe. No, you’re not. Start prior planning for financial emergencies

Assets are binding

As a couple, it is very natural for your partner and you to jointly own assets. However, it is not just assets that need to go in the back. Discussing other financial needs of a married couple such as mortgage and retirement need to be clearly discussed and planned out. In layman terms, you both need to be hand in hand when it comes to any financial aspirations or financial investments that you would want to make. Also, both your long-term financial goals must not really have a huge difference. Instead, a transparent discussion will help both of you come to a conclusion that has clarity and that can help you’ll manage long-term finances without much effort.

But do not rush!

Rushing is a bad, bad mistake in practically anything. And it is comparatively more dangerous when it comes to money management between couples. You don’t need to straightaway start combining your finances with your partner’s without a question asked. And neither do you have to official be involved with your partner’s past financial debts. You can always keep chipping and helping each other, but avoid rushing with your decisions and take up a responsibility that you’re clearly not up or ready for.

On a Final Note

Yes, your partner and you can take your little baby steps toward a sound financial management technique and keep your money in place. Financing money is easier if you bestow some trust and transparency in your relationship while having faith and not panicking at the same time. Rest assured that a stable financial system will only make your marriage stronger and healthier with time.

Budgeting and Money Saving Tips

We are always on the lookout of ways to save money. The smile and sense of accomplishment we get when we save money is priceless.

Many of us start to aim higher when we have some savings in our banks. New home, car, home appliances are planned only when we have savings in our accounts.

SO, how to save money….

There is a famous story – a great businessman lost everything he had when he made losses. He went bankrupt and didn’t even have money for his next meal. Tired and exhausted, he was sitting in a park. A man came and sat next to him in the bench. He looked at the businessman and asked, “What is troubling you my son?”  Businessman narrated his entire story to the old man. In the end, the old man smiled and wrote a cheque worth $50,000 and gave it to the businessman.

With rejuvenated energy and feeling of financial security, he took strategic decisions which made his business grew multifold. The businessman wanted to return the money to the old man, so he visited the park where he first found the old man. The septuagenarian was at the same place as before. When the businessman was about to return the cheque to the old man, staff from a mental asylum showed up and zapped the old man. They were taking him to the asylum. The businessman learned the old man was a mad who absconded from the asylum, and the cheque he wrote was phony.

The moral of the story is savings can usher in a sense of financial security, thereby helping one progress in life. There are many ways to save money, a few has been stated in the blog.

Tip #1: Create a Savings Account.

This is a tip which I personally followed. When I had to save money for my marriage, I created a savings account apart from my checking account. Internet banking offered me the option of automatic money transfer from my checking account to the savings account. I set the savings amount to be transferred and the date of transfer. On the preset date, the money automatically got transferred. This is how I saved without much hassle.

This savings gave me strength and intent to plan beautiful things for my wife such as honeymoon, new home and other amenities required after marriage. I personally suggest this as one of the best measures in saving money without budgeting.

Tip #2: 50/20/30 Saving Plan

Every person will have 3 kinds of expenses, the first one is his monthly bills such as water, electricity etc. Number two being is his savings such as fixed deposits, recurring deposits and number three is his lifestyle expenses like clothing, entertainment.

Understanding these three types of expenses is essential to have a healthy financial life. Each is distinct and essential in its own way. Senator Elizabeth Warren, along with her daughter Amelia Warren-Tyagi, introduced the 50/20/30 budgeting rule in the book “All Your Worth”.

In the book, they stated that 50% of your income will be spent on the essentials such as rent, electricity and other monthly bills. 20% should be spent on savings such retirement savings, down payment for your home. The remaining 30% can be spent on lifestyle expenses. When the lifestyle expenses are properly planned, there can be further savings.

This tip is continuation of the previous tip. Once you have mapped out your expenses, you can have target accounts for each expense, a savings account to maintain your savings, a checking account for your lifestyle expenses. Prefer using debit cards and don’t use your credit cards for any of your lifestyle expenses. This will help you to keep a tab on the money flow and will help in identify areas where you can avoid the expenses.

Tip # 3 Use Technology

In this technology savvy world, everything is available in our smart devices. Savings plan can be made using our smart phones. Gone are the days, when we used to maintain an excel spreadsheet to monitor our expenses. Now our jobs are made easy by various savings app. There are numerous free and paid budgeting and savings apps.

Digit is such an app that automates your savings. It is connected to your bank account and often analyses your spending pattern. Then it takes small amounts of unspent money every week and transfers it to your savings account. You are informed about the saved amount via text message. All the transactions are done through text messaging, for example, when a transaction is to be made, an SMS sent to digit eases the process. This app saves a lot of money and time.

Qapital is another app that helps you save money by using rules or more specifically “If then” formula. When one of the rules or goals you’ve set is triggered, the money is saved. There are penalties for not completing the target and the money can be taken away from your set expenses. It instils fresh energy and fun on saving money.

Summing Up

Saving money can be easy when we choose the right ways. Investments are also one of the options you can look for to grow your money. Savings will help in having a secure future while you enjoy your present. We have spoken at length about the various ways of saving money.