Managing your personal finances is an issue that plagues just about everyone. Regardless of how much money you are making right now, you can always improve your financial situation by finding ways to save. You can make saving and tracking your expenses simple by using good budgeting tools that will help you along the way.
Here are five easy-to-use budgeting tools that you should be using right now:
- Digital spreadsheets. It may sound old-school, but a digital spreadsheet done simply in Excel is a great way to easily create and manage your finances. A digital spreadsheet keeps track of numbers consistently and without error. What’s more, once you have a spreadsheet set up, there is minimal work to be done to keep track of cost averages, totals, and more because it will do all of the calculations for you. Check out these budget templates from Microsoft.
- Automatic savings accounts. Saving can be hard, especially if you have little money left over at the end of the month. However, it’s even harder to spend money that you don’t know you have, which is why you should always make it a habit to have an automatic savings account. An automatic savings account takes money directly from either your direct deposit or your chequing account so that you have a consistent cash flow going into your savings. Even a small amount per week can quickly add up to thousands. For example, $20 per week amounts to $1,040 per year. By using this method, you are paying yourself first, which means you won’t have a chance to spend it elsewhere first, because you won’t even know it was there to begin with.
- Automatic payments. Late payment fees and penalties have evolved into a multi-billion-dollar business. Every year, credit card companies, banks, cell phone providers, and utility companies are hoping that you make the mistake of forgetting to pay them on time so that they can charge you a fee that may be even higher than the monthly payment itself. The wonders of modern technology can save you from ever making a late payment again. All you need to do is set up automatic payments for your bills through your online banking. It will take only a few seconds to set up and will have a huge impact in making sure you never pay a bill late again.
- Cash Envelopes. This budgeting tool might sound odd, but it is a great resource to help you save. Here’s how it works: Sectioning off cash into envelopes for certain expenses creates a physical limitation to how much you can pay. As such, you have to be careful about how much you spend, because if you run out of cash in your gas envelope, you are in trouble that month (or you need to readjust your budget). These cash envelopes are used by financial experts like Gail Vaz-Oxlade and are a great way to ensure you don’t spend more than you have.
- Use an app. There are several apps on the market offering the ability to track your expenses and help you save. Some of these apps are paid while others are free. Do some research to find the best one for your needs. Check out 15 of the best budgeting apps here.
There are lots of tools you can use to help you stay on track with your budget, but nothing compares to foundational skills such as solid financial education. At Credit Counselling Services of Atlantic Canada, we aim to help Canadians with their finances and debt by providing financial education. We can provide you with the skills and tools you need to create a budget and stick with it. Contact us today for a free consultation.