Budgeting Smarter

Money: There never seems to be enough of it! If you’re feeling the financial pinch, then you are far from alone. More than 40% of Americans don’t have enough cash on hand to cover an emergency expense of just $400, and nearly as many are carrying credit card debt from month to month, experts say.

Money problems are always stressful, especially when they feel like they’re beyond your control. But it’s important to stay rational and seize every opportunity to make the absolute most of your economic situation. While it’s certainly true that some financial issues are beyond both the blame and control of their victims, it’s also entirely true that every one of us has the power to make smart choices that, if they can’t completely cure our financial woes, can at least improve things a little.

With that in mind, let’s talk about ways in which you could be budgeting smarter.

Master the Art of Budgeting

If you’re not already making a monthly household budget, then budgeting smarter is as simple as starting to do so. There’s no tool in personal finance that’s as powerful as the regular monthly budget, so don’t neglect it. Make sure that you’re tracking all of your income and expenses, and make sure that you’re balancing out your budget each month.

When you’re determining your budget for various categories, be sure to put the most important and inflexible purchases first. Don’t start by determining a big budget for restaurants or bars, because you might find that your budget doesn’t work when it comes time to add in rent and groceries. Put the rent, groceries, and other essential expenses first, and then see what you have leftover for the discretionary stuff. It’s not the most fun thing in the world, but it’s the only way to budget properly.

Figure Out Where Spending Money Makes You Money

“You have to spend money to make money,” as the old saying goes. Sometimes, it really is true!

You’ll have to use your judgment here because financial problems can constrain your options. If you’re deep in debt, spending a bunch of money is likely to be a bad idea no matter how much it will eventually “make you” back. It’s also important to note that we’re not talking about investing in business ventures or doing other things that, however likely they may seem to pay off, are not guaranteed. What we’re talking about here is investing in straightforward things with clear payoffs.

That means things like your attic insultation, which—if you’re like most Americans—is a big part of the equation when it comes to your energy waste. New insulation could save you big on heating bills, so if you have an old and leaky attic, going for this improvement could make sense.

The same goes for old, energy-wasting appliances, gas-guzzling cars, and other wasteful things. Yes, these can be tough expenses to budget for, but remember the old saying: There’s nothing more expensive than being cheap. It’s up to you to figure out what you can afford, but scrimping and saving up for an improvement that will save you more money later can be an excellent choice—and one you’ll be glad to have made when the savings start rolling in!

Shop Refurbished and Preowned Products

No matter what your financial situation is, you’re bound to be in the market for some product or other at some point. Whether you’re shopping for a car, a laptop, or anything in between, remember that quality is not synonymous with newness!

Sometimes, the best way to get the best deal is to look for used and refurbished options. Shops like TheStore offer refurbished electronics that work just as well as their brand-new counterparts and cost a whole lot less. Savvy shopping can get you far on a limited budget, so consider investing in some of these refurbished products. You could end up enjoying a laptop or iPad that would have been outside of your budget if it were new.