Whether you are living solo or have a family of your own, managing your expenses and bills is undeniably essential. Whether you don’t have enough money, or you have much to spend, doesn’t matter for they are both qualifying scenarios that call for a budget. It is also said that money can’t buy happiness, but not stressing yourself about how to make both ends meet surely will give you peace of mind. Creating a budget is a fantastic way to spend less and have a feeling of security. All it requires are perseverance and self-control. You can create your daily, weekly, or monthly budget, depending on your needs. If you are at a loss on where to start creating your budget, here are a few suggestions to get you on your way to economic stability in no time!
Creating a Budget
The first step in creating a budget is to figure out exactly how much cash you are spending and where. You always want to aim for your expenses to be lower than your income, which should include some money for savings. Ideally, the rich always budget their finances to this ratio – General Living 60%, Savings 20%, Giving 10%, and Wealth 10%. This provides them with the positive mindset of using money wisely by giving so that you receive more and creating a long term wealth plan by creating a wealth plan to have passive income.
To start your budget, you need to write down each item you spend your money on and I suggest you do this for at least a week but a month would be better. So you know exactly where your money is going.
Then identify whether an expense is a recurring charge, consistent or inconsistent and whether it is charged on a daily, weekly, monthly, or yearly basis. Keep costs and invoices and information on anywhere else your cash is going. At the end of the month, sum up, and identify your costs.
There are some great apps available for tracking your spending and creating budgets.
Do a search in your play store for budget tracking – apps like money brilliant, spending tracker, monthly budget planner, and daily expenses. Read the reviews and take a look at how they work, download one and try it out until you find the one that best suits you. Some banks now have spending trackers in their apps.
Now take a look at these expenses and see where you can save some money, first look at things like luxury items like alcohol, cigarettes, etc. can you save some money here as well as be healthier, then look at takeaway foods, coffees, dining out, shopping for items that you really didn’t need.
Then you will set up your budget for the year. This is where you will list all of your income, expenses, and savings in a spreadsheet or an app.
Ways to Save Money
Now you know all of your expenses and income and it’s in a budget you can now find other ways of saving money. We spend more money than we know and hopefully, recording each expenditure will help you to cover where your cash is ACTUALLY going.
If you find that your vehicle expenses are way too much, you may be able to cut down by selecting the quickest routes and doing several tasks or errands at one time. You will be amazed at how far your small savings contribute up.
Refigure Your Expenses
This phase might go neglected in budgeting by many individuals, but you don’t actually have to be trapped with the bills you’ve got at present. Take a look at your regular expenses and check on where you can cut costs. Is there any money that can be shaved off?
For example, mobile phone expenses can be substantial nowadays. Can you double-check the features you have added to your plan? Look over your invoice and you might discover some service(s) you are shelling out for but don’t actually need.
Do the same process with your other bills – Internet, telephone, vehicle insurances, other insurances, paid tv services, power, and health insurance are ways you can save more money. Look at ways to have bulk discounts like having your home loan, contents, and vehicle insurance with the same insurance company.
You will be surprised if you review your services every year and shop around, how the money you can actually save, it may take a little time but the savings are worth it. You just need a little time and stick to your budget to reach your objectives.