Are you struggling to manage your finances? Do you find that you barely make it through every month and don’t know where your money is going? Have you tried drawing up a budget but can’t manage to stick to it?
If you have answered ‘yes’ to any of the questions above, you are in good hands. In this post we’ll provide four easy tips to ensure you get your budget working for you.
#1 Determine Your Expenses
The first and most important step is to have a very good idea of your expenses. We’re not talking about that extra chocolate bar you just bought a second ago. For a realistic view on what your monthly expenses are, take stock of all your receipts and bank statements and capture all the relevant data. This step is crucial as it will indicate how much money you need to earn to get by.
#2 Add Your Expected Income
Now that you know how much money you’ll need to survive in a month, it’s time to take a look at what your income is. This includes everything, from alimony to rental and your salary. Now you will be able to have a good idea of what you are spending and what you can afford to spend. The key here is to refrain from spending money that you don’t have.
#3 Identify Your Savings Goals
In the next step, you’ll deduct your total monthly expenses from your total monthly income. As mentioned, the goal with a budget is to ascertain how much you can afford to set aside, if you can. If you don’t have any money left, you’ll need to revise your spending habits and cut on unnecessary costs. If you do have money left, this can be used to save or to pay off loans or debt.
#4 Monitor and Record Spending
The final step is crucial and determines whether or not you will be able to make your budget work for you. You need to monitor and record everything you spend closely. If you get into the habit of capturing all your expenses, you’ll soon see where you are overspending, and where you need to think twice before making a purchase.
It’s not necessarily the easiest thing to do, but well worth it. Sticking with your budget and actively managing it will ensure you cultivate healthy spending habits, and ultimately improves your finances. Good luck, and keep at it!