With the economy as tight as it is, creating a budget is a simple way that you can keep track of your money. Whether you’re looking to get out of debt or save up for a vacation, creating a budget can help you, and it can also bring attention to negative spending habits you might have. For example, it can help you lower your electric bill or show that your smoking habit has been siphoning from your other, more important expenses.
Making a budget is easy. In a basic way, a budget is simply your income minus your expenses. If you end up with a positive number, than you’re alright. If you end up with a negative number, you are spending more than what you earn, and this isn’t a good thing. The first step in creating a budget is making a list of all your expenses. This includes important expenses such as rent, car payments, insurance, as well as less important ones, like pocket money and the entertainment fund. Try your best to remember all the expenses you have, from medical copays to highway tolls. After all this is calculated, add it up and subtract it from your net income. Hopefully, it’s a positive number, but if not, there are things you can do to help.
Your electric bill can be a very volatile thing. By simply unplugging electronics that you’re not using, you can lower your electric bill. Minimal lifestyle changes can result in a drastically reduced bill. Using cold water in your washer machine instead of hot water is one of the first and most substantial things you can start doing to reduce your bill. Up to 85% of the energy your washer machine uses is spent on just heating up the water. Adjusting your thermostat during the year can also help reduce your bill. A few degrees up in the summer and a few degrees down in the winter reduces the strain on your air conditioning and your heater. Investigate and research different energy providers and see if you can get a better deal anywhere. A few small steps, and you’ve already made a positive impact on your budget.
Food costs can quickly add up. Expensive meals and drinks spent out at restaurants can rapidly accumulate and prove to be the veritable hole in your pocket. Save your receipts from a couple weeks and add up how much is spent on fast food or other convenient meals. The results can be staggering. The cost of just one drive thru meals can provide you with sandwiches for a week. Instead of buying a national brand, try the generic. Usually, the only difference is in the price. Invest in a Sunday newspaper and clip some coupons. You could end up saving huge amounts of money.