5 Budgeting Techniques to Try in 2022

According to Beyond Finance:

A brand new year is a chance to hit the reset button on your finances. If you are hoping to achieve new goals in 2022 these budgeting techniques can help.

Before you Begin – Answer These Questions

Before you try our new tips and techniques to transform your budgeting, it’s a good idea to take a look at the current state of your finances and ask yourself some questions:

Do I currently have a budget that I follow some or all of the time?
What do I like about my current budget or money management habits?
What do I dislike about my current budget or money management habits?
What is my biggest financial weakness?
What is my biggest financial strength?
What is my number one financial goal for 2022?

Your answers will help you choose which budgeting techniques and try. The techniques that are right for you will align with your current circumstances and goals.

#1 For Those Who Have Tried and Failed Traditional Budgets

The Anti-Budget

If you struggle to maintain a traditional budget you are not alone. Budgets are not one size fits all. For many, the level of detail and maintenance required to manage a typical budget doesn’t work well with their schedule or preferred thinking style. An anti-budget simplifies the budgeting process so you can separate your funds into fewer categories, automate savings and bill payments and have less to think about for daily spending.

To learn more check out our guide to starting an anti-budget.

#2 For Those Who Need to Start An Emergency Fund

Automate Your Savings

When unexpected things happen, having cash on hand can help you take care of business with less stress. Emergency funds typically cover one to six months’ worth of expenses. Starting an emergency fund for the first time may seem intimidating, but we promise it will be worth it.

One great way to get started is to use your tax return to open a new savings account. You can also set a goal amount and deposit funds monthly to grow your balance.

If you use funds from your emergency fund, remember to make a plan to replenish those funds so your account is ready for the next time you need it.

#3 For Those Who Lose Track of Spending on Non-Essentials

Use Separate Accounts for Bills and Discretionary Spending

Keeping track of your spending can be tricky. If you currently use one account for everyday expenses and bills, it may be difficult to keep track of how much you can afford to spend on discretionary purchases. For example, you may look at your current balance and think “yes, I can definitely afford to splurge on a night out” but the next day a bill is auto paid and suddenly your balance is much lower than you thought.

To avoid confusion, simply separate your accounts. Make one for bills, one for daily spending and one for saving.

#4 For Those Who Are Struggling With Debt

Consolidate Your Debt

Consolidating your debt allows you to combine multiple debts into one and pay them off together, usually for a lower interest rate or monthly payment, depending on your needs.

Debt consolidation often involves taking on another line of credit, like a credit card or a personal loan, and the money to pay off existing debts. Another option is to enroll your debts in a debt resolution program.

For those who want to both consolidate and reduce the amount they owe, considering enrolling in a debt resolution program. Contact a Certified Debt Specialist who can help you choose the right program.

#5 For Those Who Want to Start Investing and Grow Their Wealth

Start Small Automated Investments

Automated investing uses digital platforms to make regular investments based on predetermined variables like income, goals and risk tolerance.

One common tactic for new investors is to use apps like Acorns to round-up transactions and put the change into an investment account. By starting small you can learn the ropes of investing and eventually graduate to larger amounts.

Disclaimer: This blog is not a substitute for professional financial advice. Before making important financial decisions, consider speaking to a certified financial advisor.

Original Source