Many people cringe when they hear that they need to make a ‘budget’. The fact is, a budget simply gives you control and, in time, may surprise you by how much you will be able to save. It’s also imperative if you want to stay debt free, (or close to it) pay off your existing debts and grow a nice savings account. Read below to see 5 Tips for Budgeting that will help you become a budget master.
Tip 1) Write down your specific, exact earning as thoroughly as you can, even so far as side money, hobby income and overtime. This needs to be as accurate a reflection of your true income as possible.
Tip 2) Using the same pad and pen, write a complete list of all your monthly fixed expenses. Rent, your mortgage, utilities, credit card payments, car loan, cell phone, etc. Once you have that done divide every payment into 4 parts to know what you need to take out of each check to pay for the entire month’s bills.
Tip 3) Use a notebook and keep an exacting record or every single expense for 1 month that isn’t a monthly bill. Even something as trivial as a cup of coffee or a candy bar. At month’s end sit down with your list and take a look where you could save money, like buying coffee from the local convenience store instead of Starbucks or bringing lunch a few times a week instead of going out.
Tip 4) Once all of those numbers are crunched subtract your expenses from your income. If the number you end up with is a negative number you need to go back with a sharp knife and trim more until the numbers work. The last thing you want to do is relay on credit cards to keep you afloat, they’re only for emergencies.
Tip 5) Experts say that you should put 10% of your paycheck aside every week for savings. If you crunched the numbers and you can’t do that you need to keep shaving off stuff until you can.
If you can handle all of these tasks and make them happen you will not only have a balanced budget but will be well on your way to building a nice nest egg for yourself.