A New Way to Direct Money in Your Budget

When it comes to your budget, there’s nothing duller than bills. Bills might be a part of life, but that doesn’t mean that everyone really wants to pay them. It’s just a matter of stepping back and looking at your budget in a different way.

For example, most people think about the day that some of their bills will finally be paid. This means that they’ll have a lot of free money left over that used to go to those bills. For example, if you have a car payment then you look fondly on the day that your car payments will cease, giving you your car free and clear. However, the problem with this theory is that you will still need to make sure that the money goes towards something that is actually going to help you get other things done. Generally speaking, once we’re finished with a bill, we just regard the money as “free” — and then spend it on things that we don’t need. We don’t think about satisfying any of our financial goals, because that’s not as fun as buying a new computer or a new set of clothes or even going on vacation.

But you have to think about things that might be dull in order to get from one place to another. It might not sound as sexy to put your money away in another account, but it’s smart to do so. You won’t have to think about trying to figure out where the money is going to come from.

The only warning that we would put here is that you definitely don’t want to just throw the money into a CD or even just a savings account. The return on your investment isn’t high. If your goals are long term enough, then it’s better to throw your money into an investment account where it has a chance to really grow. That’s the reason why people build retirement accounts so quickly.

Speaking of your retirement, that’s one place where it would be wise to put some of that “free” money. You don’t have to put all of it there — but it’s really a good place to start.

As an alternative to savings you should also consider repayment of credit arrangements. With interest rates on savings accounts currently low, thought should go to settling any equity release plans or other debts where payment is due.

At first glance, you might not think about it, but doing things in this manner can really help you think about money in a completely different way. You aren’t going to have to sweat or worry about how to get things paid. By diverting money that used to be for the bills onto things that are meant to enrich your financial life, you will reach your goals sooner.

There’s a psychological element that can’t be ignored here as well. You see, when you actually take the time to put the money that used to be for the bills onto financial goals, you aren’t really losing anything. After all, you’ve already been paying this money out each and every month. So it’s not like you can’t live on other sources of money, right?

If you really think about it, there are a lot of bills in your life that definitely have an “end date”. If you direct the money positively, then you will not have to worry about what to do when it’s actually a rainy day!