9 budgeting hacks that help build financial strength and resilience

9 budgeting hacks that help build financial strength and resilience

August 31, 2023

9 budgeting hacks that help build financial strength and resilience

In spite of recent decreases in inflation, it can still become increasingly challenging to manage expenses as the prices of everyday goods appear to continue rising.

This sentiment is echoed by a recent Gallup poll, which found that 50% of Americans feel their financial situation has worsened compared to a year ago, marking the highest percentage since the Great Recession in 2009.

While we may not have much control over the overall economy, we can focus on improving our personal financial situations. One effective way to achieve this is by implementing various budgeting strategies that will enhance our financial stability and resilience during these trying times. Here are nine budgeting hacks that can assist you in building a stronger financial foundation.


Automate bill payments

Neglecting to pay a bill on time can be both aggravating and costly. Late payments can result in high-interest charges and have a negative impact on your credit score. To avoid these issues, simplify the process by setting up automatic bill payments. Reach out to your lenders and service providers to explore online payment options that are convenient and user-friendly. By automating your bill payments, you can eliminate the hassle of remembering deadlines and ensure timely payments.


Create a “wants list” to curb overspending

Spending money can be highly enjoyable, especially when it enhances the quality of our lives through experiences and valuable possessions. However, it's important to recognize that overspending can adversely impact our overall well-being. To strike a balance, it is beneficial to let your budget guide your purchasing decisions, determining what you can afford now versus what can be deferred for later. When you find yourself lacking sufficient funds for that amazing vacation or the latest smart home device, consider creating a "wants list" in a notes app on your phone. This way, as time passes, you will remember the items you desired and where to find them. Alternatively, you may realize that you no longer need or want them at all. This approach allows for mindful spending and ensures that you make informed choices about your purchases.


Use cash or a debit card for your problem spending areas

If impulsive spending poses a challenge for you, it's crucial to identify the specific areas where this behavior occurs. For instance, you might find yourself consistently exceeding your budget on new clothes or carryout food. Instead of relying on credit cards and adopting a "YOLO" mentality, consider implementing a budgeting technique that involves using only cash or a debit card for indulgent purchases in those particular categories. By doing so, you will have a clear indication of when you have exhausted your allocated funds for those expenses, serving as a reminder to halt further spending. This approach encourages responsible financial habits and helps curb impulsive buying tendencies.


Sock away funds for emergencies

Having money in your bank account instills a sense of financial assurance, knowing that you are prepared to handle any unexpected circumstances. Determining the appropriate amount to save for emergencies is often the initial concern. While financial experts typically recommend saving 3 to 6 months' worth of expenses, utilizing an emergency fund calculator can provide a more precise figure tailored to your specific situation. This designated fund acts as a safety net, covering expenses such as appliance repairs, vehicle maintenance, unexpected home emergencies, insurance deductibles, and various other unforeseen costs. By establishing and consistently contributing to an emergency fund, you can face unexpected situations with confidence, knowing that you have a financial buffer to rely on.

Get realistic with sinking funds

Emergencies can catch us off guard since they are unforeseen events. On the other hand, there are significant expenses that we know will arise but may not remember until they are upon us, such as vacations, insurance payments, and holiday spending. Instead of resorting to credit card debt to cover these important expenses, a wise budgeting strategy is to establish a sinking fund, enabling you to pay for them in cash.

For instance, consider the winter holiday season, where you typically spend around $1,800 on gifts, gatherings, and memorable experiences. By setting aside just $150 per month in a separate account or savings bucket, known as a sinking fund, you will have accumulated the full $1,800 by the following year's holiday season. This proactive approach ensures that you are financially prepared for planned occasions and eliminates the need for relying on credit cards. By consistently saving in a sinking fund, you can enjoy these special moments without incurring debt.


Save on homeowners and auto insurance

One of the most convenient and effective ways to save money is by reviewing your homeowners and auto insurance policies. The insurance market is highly competitive, benefiting consumers as it offers the potential for finding more affordable options. However, it's important to carefully assess the risks associated with lower-cost coverage when considering a switch. If you're not comfortable navigating the process on your own, seeking advice from an insurance professional is advisable.

Personally, I make it a point to explore new insurance providers for my home and auto coverage every two years. Taking advantage of new customer discounts can result in significant savings, potentially amounting to hundreds or even thousands of dollars annually. Furthermore, I maximize my savings by bundling my homeowners and auto insurance together. This straightforward step contributes to easy insurance savings by qualifying for discounted rates. 

Lastly, if you have sufficient emergency and sinking fund savings set aside, it might be worth considering increasing your insurance deductibles. Opting for a higher deductible can lead to reduced monthly premiums from your insurance provider, freeing up more of your hard-earned cash each month.


Gulp your daily “budget smoothie”

Budgeting may initially seem like a chore, but if you break it down into manageable daily tasks, it becomes much more manageable. This approach is a "budget smoothie." Each morning, dedicate 5-10 minutes to review your budget and ensure you are staying on track financially. Just as drinking a green juice can contribute to your physical well-being, incorporating a brief "budget smoothie" session into your morning routine can promote your financial health.

Additionally, given the prevalence of identity theft, scams, and online fraud, it's advisable to regularly review all your accounts to ensure their security. This practice safeguards your financial well-being in an increasingly digital world. By dedicating a small portion of your day to managing your budget and keeping a close eye on your accounts, you can maintain control over your finances and protect yourself from potential risks.


Budget with your partner

If you are married or in a committed relationship, engaging in budgeting together with your partner can greatly enhance the harmony in your relationship. By openly discussing personal goals, creating joint plans, and reviewing areas for financial growth, you can navigate these conversations more smoothly when you are looking at the numbers together. 

Taking control of our finances empowers us to actively pursue the life we desire. When we share our lives with someone, it becomes crucial to align our visions and be on the same page. Our budgets serve as a tangible representation of that shared understanding and commitment.

By collaboratively managing your finances, you and your partner can strengthen your relationship, enhance communication, and work towards your mutual goals more effectively. Budgeting becomes a valuable tool that brings you closer together and enables you to shape the future you envision.


Use a free budgeting app

If you've previously attempted budgeting but found it challenging to maintain or overly burdensome, it may be worth considering automating your budgeting process. One recommendation is to try out Empower's free budget planner. This tool enables you to create a comprehensive budget, make necessary adjustments, and gain a clear overview of your spending, all in a secure and convenient online platform.

By automating your budget, you alleviate the effort and additional work typically associated with manual tracking. Instead, you can rely on technology to streamline the process for you. This approach serves as the ultimate budgeting hack, simplifying your financial management and allowing you to focus on other aspects of your life.

With an automated budgeting tool like Empower, you can effectively take control of your finances and make informed decisions without the added hassle. Embracing technology in this way makes budgeting more accessible, efficient, and ultimately more likely to stick with you in the long run.

Investment advice offered through Stratos Wealth Advisors, LLC, a Registered Investment Advisor. Stratos Wealth Advisors, LLC and Flagship Financial Advisors are separate entities. Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Flagship Financial Advisors, or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Flagship Financial Advisors.