Whether you are looking to pay off debt, buy your first home, or just make ends meet, figuring out how to pay for it all can be really stressful. With a bit of determination, however, you can achieve your financial goals. Here are some easy-to-follow budgeting tips to get you on your way.
#1 Create a Budget and Stick to It
The first step in making a budget is totaling all of your monthly income. Next figure out your expenses. Begin with the essentials, food, housing, utilities and transportation. Then list all of your monthly bills including insurance, medicines, minimum debt payments, clothing and entertainment. Don’t forget about holidays, birthdays and other special events. Now subtract your expenses from your income.
Hopefully you will break even, or have some money left over. If your number is negative, don’t worry. There are lots of ways to cut down on spending. Just keep reading! You can also look into making some extra cash through selling things you no longer use, or picking up some extra work hours.
#2 Reduce Food Spending
The best way to save money on food is to plan ahead! Put together a menu for the entire week. Try using the same ingredients in several recipes to cut down on costs. Now make a shopping list based on your menu and stick to it! This planning helps prevent impulse buys. It also puts an end to costly restaurant visits because there is nothing to eat in the house!
Choosing where to shop and what to buy can also cut down your food costs. Buying generic brands can save you up to 29% compared to name brands. If there is something you go through a lot of, buying bulk at a warehouse store like Costco or Sam’s Club offers significant savings. It’s also worth shopping at discount grocery stores like Aldi. It really does cost less. Don’t forget to check for coupons on your favorite items. Just be careful that it doesn’t entice you to buy something you don’t need just because it’s on sale!
#3 Cut Non-essential Monthly Expenses
Netflix and Cable TV may need to be put on hold for a while. Look at your cell phone service and data plan and see if there is a better deal out there. Make delicious home cooked meals, rather than spending money on going out to restaurants. Exercise at home or in the great outdoors and cancel your gym membership. All these luxury items can gradually be reintroduced as your finances allow.
#4 Choose Hobbies Which Need Little to No Money
Sure, there are many hobbies you can practice without breaking the bank. But it’d also be a good idea to cut down on costs even further by choosing hobbies where spending is cut out completely. Activities of this sort can range from choosing to play at no deposit casinos like Kings Chance, or even making do with Knick Knacks around the home and creating crafts with your family.
If you want to get out of the house without spending, find out when your local museums have free days. If you enjoy the arts, look for free concerts, shows and lectures at nearby college campuses. You can also check out what’s happening at the public library. You may be surprised at how much they have to offer for all ages. When the weather is nice, take advantage of the great outdoors through hiking, biking and relaxing at the beach. It’s amazing how much fun you can have for free!
#5 Set up an Emergency Expense Fund
Cars break, people get sick, houses need repairs. Take the money you are saving on groceries and entertainment and put aside a little cash each month. Ideally set aside $1,000 as an emergency fund. This emergency fund will not only give you peace of mind, it may save you from taking on costly debts when the unexpected happens.
#6 Stop Using Credit Cards
When you use a credit card it is easy to go over budget, since you don’t see your expenses until the end of the month. Then you are stuck with high interest rates and fees that can really put a strain on your finances.
Debit cards take money straight from your bank account. No interest, no fees, no overdrafts. If it’s still hard to stay on budget using a debit card, try the envelope system. That’s where you take out cash for a budget category, say your groceries. Decide how much you can spend on food at the beginning of the week. Take out that amount of cash from the ATM and put it in an envelope. Only use that cash to pay for your food. Once the cash is gone, don’t spend any more money on food. This can be used for entertainment, clothing or any area where you have a hard time staying within your budget.
#7 Pay off Debt
The snowball method is a great way to dig yourself out of debt. Here is how it works. List all of your debts (except your mortgage) from smallest to largest. Send in minimum payments on all of your loans, and then put as much money as you possibly can into paying off your smallest loan. Once that loan is paid off, move on to the next smallest loan. It will feel great watching those loans disappear one by one.
#8 Buy Everything Discounted or Second Hand
Sometimes you just need to buy something new. When you do, thrift shops, consignment stores, estate sales, and second hand book stores are full of treasures at great prices! You can also find fantastic deals on furniture, pet supplies, toys and bikes on second hand websites such as Craig’s List. If you prefer to buy new, check out discount stores like TJ Maxx, Marshalls and Burlington Coat Factory.
#9 Review and Adjust your Budget Monthly
Budgeting isn’t a one time project. Every month look at what’s working for you and what’s not. Make adjustments where you need to. Plan for the month’s unique expenses, such as a birthday or back to school shopping. One of the many great online tools such as Mint, YNAB and EveryDollar provides a great tool to help with monthly planning.
Following these budgeting tips will put you on track to meet your financial goals. Whether it’s living on a balanced budget, paying off loans, or saving for the future, it’s all within your reach!