Creating and living on a budget is one of the first pieces of advice financial professionals offer to clients having money problems. This is no accident. A budget is not only an incredibly useful tool, but also a necessity for anyone who wants to maintain sound finances.
A budget is little more than an informational framework designed to help you understand your daily financial situation. A basic budget contains just three things: a list of all income, a list of known expenditures, and the totals for both.
As long as the total income exceeds total expenditures, you’re golden. If it is the other way around though, you are underwater. Before you panic, know that there are ways to flip the script. In fact, below are four easy but overlooked ways to better manage your budget.
1. Purchase Off-Brand Items
Did you know that brand and quality do not always correlate? It’s true. You could spend $500 on a pair of designer sunglasses or $40 on an off-brand of equal quality. More often than not, a higher brand price is tied up in the name. There is no measurable difference in quality.
The point here is to buy off-brand whenever possible. You can save a ton at the grocery store that way. You can save more when you are buying new clothes for the kids. You don’t need the most expensive brands, most of the time.
2. Do the Math
When you do get ready to purchase something, doing a little bit of math can go a long way. At the grocery store, figure out the per-unit price before you pull an item off the shelf. Per-unit pricing gives you a more accurate picture of what you’re spending.
Another example of doing the math relates to batteries. Alkaline batteries are cheaper at the cash register. But they are single-use batteries. On the other hand, a rechargeable lithium-ion battery from a company like Pale Blue Earth can be charged 1000+ times. Even at four times the cost at the cash register, you get 1,000 times the usage. In the long run, the lithium-ion batteries cost less.
3. Repair, Repurpose, and Reuse
Yet another easy way to manage your budget is to stop throwing things away unnecessarily. Repair, repurpose, and reuse whenever possible. The more often you do all three, the less money you will spend replacing things.
For example, maybe one of the kids falls down and rips his pants. Not a big deal. Instead of throwing them away and buying a new pair, sew them up. If you don’t know how, learn. It’s not hard.
4. Cook at Home
A 2020 survey from ReportLinker revealed that 98% of American adults say they prefer to cook at home. But in reality, just 50% do so on a regular basis. And even if that, the study defines cooking on a regular basis as preparing anywhere between three and six meals per week at home.
If you are looking to better manage your budget, you can go a long way toward that goal by cooking all of your meals at home. And like sewing, learning to cook isn’t hard. You don’t have to prepare gourmet meals three times a day, every day. Cooking something as simple as fresh hamburgers and fries will cost you less at home than going to a restaurant.
Learning to manage a budget can be challenging at first. But over time, it gets easier. The key is learning to do things more efficiently and cost-effectively. Do that and you will be surprised by how much less you spend.