Most people want to be better with their money. In fact, budgeting and saving better is consistently one of the biggest New Year’s resolutions year in and out. And these days, there are endless tools and products to help us get on top of our money.
Believe it or not, this includes cryptocurrency. While it is easy to dismiss crypto as just a novel investment vehicle, there are several ways that it can be used to create a better financial situation. In this article, we will go through the ways that you can create a better crypto-powered budget:
New Investment Opportunities
As many financial experts will tell you, one way to have a better financial situation is to create new income streams. Luckily for those interested in crypto, it offers a viable way to increase your income. Tokens like Bitcoin have been crowned some of the best-performing assets of the last decade, outperforming even others like gold. On top of this, there are always new cryptos entering the market, many of which are bringing in massive returns. As Alan Draper has written, the new crypto to purchase includes everything from gaming to meme coins.
If you choose to invest in cryptocurrency, you can be encouraged to put aside a portion of your funds to invest. As an income from crypto comes in, it can be used to cover expenses or saved for a rainy day. More money is a big shortcut to better budgeting, and crypto offers this in abundance.
Creating Passive Income
We’ve touched on the ways that you can increase your budget by trading crypto actively, but there are also ways to earn a passive income from it. Tokens based on a proof-of-stake consensus, for example, can be staked to earn an interest. By doing this, you can put money aside periodically to invest and then get some back after a while. Anyone who struggles with sticking to a budget can essentially game the system this way.
First, the money is locked for a certain period of time so you cannot spend it even if you wanted to. On top of this, passive and low-risk income comes in at the end of the period. If you set your crypto investments to pay out every month or a few months, you can use the interest to pay bills, rent, and other relevant expenses, which keeps you on budget.
Paying Bills Automatically
One of the hardest parts of budgeting is not just choosing an amount to allocate for various needs but also making sure the exact amount is paid and on time. The good news is that many recurring expenses can be paid for automatically with cryptocurrency. There are several apps and tools that automatically convert crypto to fiat and pay subscriptions, energy, water, and other such bills.
This sort of setup would be very useful as the funds will be kept as crypto (meaning they are harder to spend on frivolities) and only converted when it is time to pay the bills. By opting for such a system, consumers can be sure that not only will their bills be paid on time but their funds will only be spent on their intended purpose.
HODLing
In a bid to combat inflation and other economic issues, many people put their money into crypto for a long time, otherwise known as HODLing. And while it is often used as an investment strategy, it can also work for people on strict budgets. If you put your money into crypto, you make it much harder to spend and this can help you stay on top of your savings goals long-term.
Smart Contracts
Anyone who has tried to budget will tell you that sometimes, you are fighting against your own self-will. But this can be done a lot easier if you leverage smart contracts. These are blockchain-powered programs that complete transactions based on pre-set instructions and cannot be altered.
If you set up smart contracts to move some money into savings, pay some into an expense account, and hold money for a certain amount of time, it will do so. No amount of begging or pleading will change its function and in many cases, this means you can stick to your budget as strictly as possible.
Conclusion
If you’ve been trying to better your budgeting skills, cryptocurrency might just be the thing you need. As we’ve broken down in this article, cryptocurrency can create several streams of both active and passive income, which can be used to increase your budget and cover expenses. Crypto-focused tools can be used to automatically pay bills, or you can opt for smart contracts, which execute functions without any margin of error. Finally, you can stay on track by storing your funds as crypto thus, making them harder to overspend.
