8 Ways To Put More Money in Your Budget

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My past few posts have been comprehensive socioeconomic personal finance essays, so I thought I’d give you guys a break with something more practical today!

Hope you enjoy these 8 tips to add more money to your monthly (and yearly!) spending.

1. Track your spending

I’m sure you didn’t think you were getting away without this! One of the easiest ways to find more money in your budget is to know exactly where all your money is going. How you want to do this is completely up to you. Cait’s Mindful Budgeting planner is a beautiful low-tech notebook that you can carry with you day-to-day, or if you prefer something on the computer, the Money by Jumsoft is the app I’ve been using years.

2. Set up all fixed payments to happen automatically and coincide with payday

One of the easiest ways to manage your budget is to set up as many payments as you can to happen automatically. Things like your rent, internet, cellphone, electricity, car insurance, and so on should all happen without you having to write a cheque every month. You can choose to set these payments up to be debited automatically from your chequing account, OR you can have them charged to a credit card and then set up an automatic payment bi-weekly or monthly to your credit card for the total amount of your bills.

To ensure you always have money to pay these expenses, you can set up an automatic transfer to coincide with your payday. For example, I get my cellphone bill on the 5th of every month, but the payment isn’t actually due until the 21st. If I pay myself on the 15th of each month, I’ll set an automatic payment on the 16th of every month — this way there’s always money in my account and I never miss the bill’s due date. If you don’t like when your bills are due — for example, you have too many due the first week of each month — you can call your service providers and ask if there’s any flexibility in the due dates. You’d be surprised how often they’re willing to change to accommodate you!

3. Over-estimate variable expenses

One of the easiest ways to make sure you’re always flush with cash instead of running up short is to over-estimate your variable expenses by 10-20%…. or more. For example, my husband and I budget $200 per month for gas for our car, and 10 out of 12 months per year, it’s way too much. Sometimes we spend less than $100! We do the same over-estimation on spending for things like groceries and dry-cleaning. By over-estimating how much we’ll spend in these categories each month, we ensure there’s always money leftover. Coming under budget will keep you stress-free financially, and make it easier to accommodate the months when you go over in your spending.

4. Pay expenses annually when you can

Things like car and home insurance often give you a bit of a break on the dollar amount if you’re willing to swallow the bill once a year instead of on a monthly basis. If you can afford to absorb the cost of these expenses as a one-time fee, you could end up paying less overall. Plus choosing to pay your home or car insurance once a year eliminates a monthly bill from your expenses!

5. Give yourself a few hundred dollars of spending money

When you get serious about debt repayment or a big savings goal, you might be tempted to axe all “fun” spending from your budget. Many young people who write me have maxed out their credit cards and now feel so guilty about they’re debt, they don’t think they’re allowed to have spending money anymore. This isn’t true! First, don’t be so hard on yourself. Second, cutting any leisurely spending from your budget is not a good long-term plan, and more likely than not, after a few months you’ll end up feeling so deprived, you’ll give up on your debt repayment plan.

Make sure to give yourself at least $200 per month ($50 per week) that you can spend guilt-free on clothes, dining out, and hobbies. If you can’t afford to do this because your other expenses are so high, find a way to make more money. Being able to grab a coffee with a friend or go for drinks after work once a week can be the difference between feeling ok about your financial situation and completely hating your life. So be kind to yourself, give yourself a spending allowance!

6. Spend cash, save your change

If you follow step #3 above to give yourself a few hundred bucks of spending money each month, when you spend it and are left with pennies and nickels, put your spare change in a piggy bank. My husband and I put all our $1 and $2 coins in one piggy bank, and all our smaller change in another. When they fill up (and this might take months or years, but that’s ok), it amounts to a few hundred dollars that feels like “free” money. You can use it to splurge on something like new clothes or a vacation, or make a big payment towards a debt that you’re paying down. Either way, you’ll feel richer because of it.

7. Plan your purchases around rewards points

You should never buy something just because it’s on sale or because you get points for it, but you should plan your grocery list around the promotions that benefit you the most. Typically most grocery stores have a point system that works out to approximately a 1% return, which is better than most savings accounts. You can’t tell me you’re hunting everywhere to earn more than 0.5% interest on your savings than turn your nose up at the ability to do so at your local supermarket! If you can earn points for buying green beans instead of the broccoli you planned, go ahead and switch it on your list. Better yet, sit down with the grocery store flier when you make your shopping list, so you can maximize the promotions. When you have enough points to redeem for money off or free items, use it and put the money you saved in your savings account or use it to treat yourself guilt-free.

8. Always keep a buffer of a few hundred dollars in your budget.

Recently a study revealed that nearly half of Canadians are within $200 of not being able to pay their bills each month. Yikes! This means even something as little as a bad traffic ticket could put them behind on their bills. Don’t put yourself in this situation! When you’re creating a budget, try not to make a plan for every penny — even if it’s good intentions, like putting all your extra money to savings. Try to leave a few hundred dollars in your monthly budget for miscellaneous or unexpected expenses. At the end of the month, if you haven’t used this buffer, you can choose to roll it over to the next month or put into savings (an emergency fund is perfect!) and start again.


10 Comments

  1. Jennifer

    I use YNAB which incorporates, and in some cases improves on, many of your points above. It’s a complete overhaul of how I was viewing money before, and lends itself to stress-free money management.

    In the beginning you give every dollar a job, so then you know what you can spend on yourself. It’s guilt free spending because you already have all of your other priorities taken care of.

    People without a good system should definitely try it out!

  2. Evan McFatridge

    This is a great post full of useful tips! I have been doing number one for a while. When you write it all down you know exactly where your money is going. I also believe you need to set some money aside to have some fun and “treat yourself”. It’s important, otherwise you will not be happy and get frustrated. There’s nothing wrong with using purchases to get rewards either. I prefer air miles myself. Sometimes I’ll save up cash for a purchase and put the money on my credit card and then make the purchase with my credit card to get the air miles. Anyway, great points and keep it up.

  3. If you’re paying annually for things like insurance annually, why not set up an automatic payment to pay a portion of it into a separate account, just like paying fortnightly premiums, except to yourself? Then when the invoice arrives, you have the money already sitting there ready.

  4. Transferring money to your savings should also be part of those automatic payments each month. I set mine up to coincide with my paycheck, so I ensure I am always paying “myself” before I see all that excess cash in my bank account and go on a spending spree.

    I also came across the following article about treating yourself without breaking the bank, which is great when you’re trying to hit some financial goals but don’t want to completely deprive yourself while doing it. Enjoy!

    http://thefinancialdiet.com/the-treat-yo-self-emergency-kit-that-will-stop-you-from-impulse-spending/

  5. I too always advocate people automate payments, but admittedly, I don’t do many myself! I prefer to be more hands on with my bills, especially ones that are variable like electric because we’ve had issues with misreported bills before. A few that are fixed like Hulu or the internet bill are automated. Savings though…that for sure gets automated!

  6. M1M

    Wish in Brazil was this easy.

    You guys are so lucky!

  7. Using Mint or something similar makes all of this so EASY. In this day in age, there’s just no excuse to not keep a budget, and to keep track of your spending!!

  8. Tara

    Over-estimating variable expenses, so simple and such a good idea! My bank lets me use envelope style budgeting in my checking account, but I just set aside the average for each category. Over-estimating would be smarter!

  9. Anne Logo

    Love these tips! The biggest thing that helps me is keeping track of how much Ive spent/what I spent on, and I compare my spendings weekly and monthly. I always like to know where my $$ is going. I feel like Im more in control that way! And automatic transfers to my savings account after every pay. I have been doing this for a while and have about 15k in savings and Im only 22!