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5 Budgeting Tricks You Won’t Really Work | News, Sports, Jobs


Metro graphic Allocating your hard-earned dollars to a budget can be tricky, but there are a few tricks that will help you keep more of those dollars in your pocket.

Budgeting is like New Year’s resolutions – we all know we have to make changes and follow a plan, but how long do those plans usually last? For many people, saving and budgeting is so difficult that they deprive themselves of ever achieving the financial happiness they deserve.

When all else has failed, these five budget tips may be just what you need to save money and finally stick to your budget.

Budget tips #1: Out of sight, out of mind

I had a teacher in high school who used to say, “Show me an income, and I’ll show you how to live on it.” Let’s face it, spending money is just too much fun. If you have extra money in your budget, chances are you will spend it.

Case in point: Amber Heard filed for bankruptcy last month, failing to meet her debts and promising donations, even though she earned $2 million for a few weeks of work on Aquaman 2.

If you’ve tried everything and can’t save money, try hiding it. We’re not talking about burying your money in the garden.

Instead, check out some automated savings programs like Bank of America’s Keep the Change program.

The purchase price is rounded up when you use the bank’s debit card and the difference is automatically transferred from your current account to your savings. While $3.50 for a triple-choco, Cafe Venti takes $4 from your check and transfers $0.50 to your savings account.

Don’t miss a savings account interest rate of 1.50% on a Discover Online account. That’s about five times the average for savings accounts nationwide, and you pay no monthly fees.

Another way to track your budget by hiding money is to lock it in with certificates of deposit (CDs). These are short-term notes sold by the bank that pay interest from three months to three years. You can’t use the money until the CD matures or risk a penalty or loss of interest, forcing you to keep the money saved.

Budget Tips #2: Spend Money to Save Money

Most people say, “Spend money to make money” only joking, but it may be true that you have to spend money to save money.

Fresh out of college and after landing my first real job as a financial analyst, I decided to save every penny. I skimped and worked extra jobs to build my nest egg and achieve financial freedom.

I was saving so much and working so hard that I would burn out every few months and eventually go on a spending spree. The financial equivalent of a yo-yo diet was constantly resetting me.

Be sure to spend at least a small portion of your hard-earned money each month. Plan your leisure money carefully, but make sure you’re enjoying life and can stick to your goals.

Budget tricks #3: Flip your budget

Most people start their budget by first taking expenses out of their income. Unfortunately, by the time they have paid all their expenses, there is nothing left to save and invest.

They don’t feel particularly motivated to reduce their expenses because they can pay for everything with their current income. The result is little financial discipline and a savings account that never grows.

Turn your budget upside down with this budget hack. Take out money for savings and investment before your normal living expenses. The general rule is 10% of your income, but you may want to try a little more depending on how much time you have left to reach your financial goals.

If you can’t meet your expenses with the remaining money, it’s time to start cutting your expenses.

Budget Tips #4: Invest in Yourself and Earn More Money

Who needs budget tricks when you can make more money? So stop spending all your time worrying about how to save money and spend some time thinking about how to earn extra money.

Ideas for making extra money range from quick polls and social media sharing to full-fledged projects.

What, don’t you get five extra hours a week for a hustle? The best way to earn extra money is through passive investments such as dividend investing, bonds, and peer-to-peer lending. You will be able to increase your income without taking a second job.

Budget Tips #5: Separate Your Money with Budget Breakdown

We spend money because we have it. That extra $200 left in your checking account at the end of the month is just too tempting. If it’s there after you pay your bills, you’ll spend it.

That’s why I like to create separate savings and checking accounts for different needs. Budget allocation is all about creating a bit of financial discipline by dividing your money according to your goals. For example, you might have a savings account for your emergency fund and an account for other savings.

You can open a checking account for basic necessities like utilities, groceries, and the mortgage while you hold money in another account for expenses that aren’t as important.

Budget allocation helps you stick to a budget because you’ll only spend what’s left in an account. It “quarantines your money” in different places.

The bucket strategy also works for retirement investing. Separating your retirement investments into three buckets can help you earn the money you need for expenses while protecting your money from a stock market crash.

The beauty of these five budget hacks is that you may not even need to cheat your budget after a few months of use. Do anything for three months or more, and you’ll create a habit that works for budgets too! Create good spending habits with these budget tips and you’ll be surprised how quickly you’ll reach your financial goals.



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