As we head into the year 2020 one of the most important things on the mind of many people is making changes to their spending habits. Especially right after Christmas, most people realize they do not have control over their spending. Spending without an established budget is like driving with a blindfold. It's impossible to know where you're going if you can't see the road ahead. Despite stereotypes, budget planning isn't just for cash-strapped individuals. Budgeting provides immediate value to anyone interested in taking control of their finances.
Today the Rules of Thumb blog from MoneyThumb would like to share below several ways to help put yourself on a budget in 2020.
Establish Your Net Worth
Budget planning lets you follow the money. There are many helpful online trackers that offer visual reports in the form of pie charts or bar graphs to help you increase your awareness of your spending habits. You can import financial information from your checking account, savings account, credit cards, mortgages, car loans, or student loans with online budget planners. A clearer picture of your net worth will then reveal itself. One of the best tools for converting your financial statements is a PDF financial file converter from MoneyThumb.
Your Budget vs. Your Spending Habits
Compare an itemized monthly expense report to annual budgetary goals. The numbers won't lie, and you'll see what sort of waste accumulates. Check budget planners on your mobile phone through various applications to help mitigate this wasteful spending.
Align your priorities in a methodical way before minor issues turn into bigger problems. Setting up budget goals with your spouse or significant other will minimize any mishandling. Also, establish monthly budget categories with specific amounts that you can adjust manually. You can even set up your account to receive alerts when you go over your budget allowance.
Build Healthy Money Habits
Build healthy spending habits with a detailed budget plan. Healthy habits work to reduce debt, prevent garnering additional debt, and pay off expenses. Many budget planners send notifications for bill payments, rate changes, and late fees, enabling you to develop fiscally sound practices.
Set Smart Goals
Arm yourself with the knowledge to make sound financial decisions and reduce stress. Track your goals to pay off credit cards or afford a new home with online budget planning tools. Your financial health won't be a guessing game when a spur of the moment trip or any other large purchases arise.
Spend less, save more. Budgeting works to save you money through discipline. And since saving takes utmost priority overspending in a well-rounded budget, your long-term financial goals may fall within arms reach. Some budget planners even offer ways to save by analyzing specific areas in your budget. For example, if you're paying an outrageous amount of interest on a credit card, some budget planners recommend transferring your balance to a different card with a lower APR.
Budgeting gives you a clearer picture of your disposable income and helps you avoid debt. Less debt also means a better credit score, which helps when faced with larger investment opportunities. Some budget planners even have free credit report tracking options that make checking your credit score and payment history a breeze.
Handle Your Taxes Wisely
Making sure your income tax is properly handled and filed can have a positive effect on your budget. Knowing you are not going to be flagged by the IRS because you are meticulous about taking care of your income tax responsibility is one less headache you have to deal with when it comes to money. Smart people are filing their taxes online, and with good reason. Money.com has this article that compares tax prep software and can help you choose the right software for filing your income tax online. They list some very good reasons for doing so:
• It’s convenient
• It’s secure
• It’s the fastest way to get a refund (IRS issues 9 out of 10 refunds in less than 21 days)
• It’s free for taxpayers whose income is below $69,000 when filing through the IRS’s Free File portal
With so many online budget planning options, your biggest investment will be your self-discipline. Remember to keep an eye on what's going on in your budget planner. Budgeting does you no good if you ignore the plan. Also, make sure you are taking into account life changes like marriage, children, and raises that alter spending habits.
By using the above tips from MoneyThumb you will be able to make 2020 a much better year financially, for you and your family. Hopefully, by next Christmas, money won't be something you have to worry about.