The budget. It’s right at the top of the list regarding anything to do with your finances. If you want to know how to save better, spend less or buy something, you need a budget. Yet some aren’t able to easily put a budget together. Below, we’re going to look step by step at what your budget needs. From putting it all together to how to change it for the better.
Have goals in mind
The key of making any good budget is having a reason to. Sometimes, it might be simple short term goals like paying off a loan. It may also be something a lot more long term like saving up for a college fund or your own retirement. The point is that you need goals. This is to give you real motivation o calculate a full budget and stick to it.
Get the big stuff out of the way first
The obvious things we need to consider are those big recurring costs we can rely on to take a chunk of our money now and then. The biggest ones to think about are mortgage/rent payments and the car. The bills for energy, water and phones come after. Then any insurance payments. Finally, you need to think about your tax, too. Sites like www.wealthmaverick.com/estimate-your-taxes-with-a-tax-bracket-calculator/ can help you calculate your tax.
Track your spending
Then comes all the smaller purchases and spendings after. These might seem like a troublesome thing to try to pin a budget to at first. Sometimes we spend more than usual, sometimes less. The key is to find the average range your spending tends to operate within. Use apps to track your spending each week for a month or two. When you’re satisfied you have enough time to calculate an average, use that in your budget.
Make a spreadsheet out of it
You absolutely need a physical and visible way of keeping track of your budget. A lot of people might use paper for this but that can become messy. Spreadsheets allow you to follow a budget every month, changing calculations when you need to and keeping track of how well you follow it. You will get a real idea of places you can start cutting and saving more as you keep it up to date as well.
As you budget your finances, you will see opportunities to use money in more meaningful ways. You will be able to identify when you have spent more than usual but to no real gain. Start putting aside money into another category. Invest that extra wealth and start making it work for you.
Finding more ways to save money
As we’ve said, keeping that budget will also help you begin to find ways to save money. If you have a goal, you’ll probably be looking for more ways to do it, too. That’s why it’s important to keep tracking your expenses with the apps mentioned above. http://money.usnews.com/money/personal-finance/articles/2012/09/11/15-ultra-frugal-money-saving-tips and similar sites can get you started on your saving efforts.