Table of Contents Hide
Rather than perceiving budgeting as a pledge to a joyless life of asceticism, you should see it for what it is: a vital part of a vigorous financial life that will ensure that you always have the wherewithal for the things of importance to you. After all, you always want to know how much you can spend and what you can put aside. Budgeting also allows you to eradicate debt faster and uncover money that you can put to better use.
With that in mind, here are budgeting tips to make money management easy.
Budgeting Tips: Stay On Top of Your Budget
To keep a handle on your budget, you must establish one each month. A week prior to a new month is when you should plan the coming month’s activities and expenditures. For example, you may have a dental appointment or weekend getaway in August, but not in September. After you’ve figured out your month, you can establish a realistic budget.
Make Every Dollar Count
Consider practicing what’s called “budgeting to zero,” which can show you where your cash is going and give every buck you earn a purpose. Such budgeting entails tracking each dollar and assigning it a place in your spending plan until you don’t have any money to spare. For instance, if you earn $3,000 monthly, you shouldn’t have a dollar left after budgeting fixed expenses, investments, and savings, etc.
Get the proper tools in place from the start so that your budgeting will be successful. Applications such as Mint can help you track your money, and budgeting tools can help you see precisely where your cash is going, inform you if you’ve overspent, and keep you on top of obligations and objectives.
Be Clear About Needs Versus Wants
Let’s be honest: anything other than food, your rent or mortgage, and your monthly bills are “wants” as opposed to “needs.” Having said that, you should budget in “wants” as well, as you can afford them. You may want to adhere to the 50/30/20 rule, which allocates 50% of your money to essentials, 30% to non-essentials, and 20% to savings.
File Bills and Receipts
You may need bills and receipts for tax purposes and in case an item requires disputing. Whether you save your documents electronically or put them in a physical file, it’s important that you keep your bills and receipts organized.
Direct Deposit Savings
If your employer offers direct deposit, you may want to have a portion of your income go directly into your savings account. Doing so will relieve you of having to include savings in your budget and of having to keep track of them.
Prepare for the Unexpected
Stuff happens, and usually when you least expect it. That’s just life. Perhaps your car breaks down, or there’s a trip to urgent care. That’s why budgeting advice includes establishing an emergency fund of at least $1,000.
Plan for Big Purchases
If you’re mulling buying a pricey item such as a new computer or dining room, you must plan. Settle on a date on which you want to make the purchase, then divide the amount by the number of days you have. For instance, if you intend to buy a $1,500 laptop in 300 days, you know you need to put aside $5 each day. Doing so will keep you from having to use plastic, going into debt, and paying interest charges. If that’s happened, get help at Freedom Debt Relief.
Utilize Separate Accounts
Establishing a separate checking account for, say, fixed monthly expenses can help you keep everything organized. Doing so can also help you easily see how much you have available to spend monthly on non-fixed categories such as groceries.
So, yes, employing budgeting tips such as these can make money management easy. The key is getting started – then sticking with it. After a while, you’ll have developed healthy spending habits that will serve you well throughout your life.