The most effective way to fix your financial problems is to be aware of exactly where you stand with money. These ten tips on budgeting will show you how to take command.
Tips On Budgeting 1 – Why You Need A Budget
The main reason to construct and monitor a budget is to put you in control. This will also help to reduce all the stresses you have about your money and where it goes. A further benefit is that it will help you control and reduce your debts if you have them, plan for the future and save money.
Tips On Budgeting Two – How To Plan Your Budget
To start off your budget plan don’t just concentrate on your current income and outgoings. You need to plan for your future and budget for savings plans or other interest generating activities that will look after you in the longer term.
Tips On Budgeting 3 – Getting Your Budget Started
Your budget must record monthly income and costs and set it up so that you can plan for the months ahead. Knowing exactly how much income you get every month is often a lot easier to record than all of your monthly outgoings. Before you create your budget lay your hands on your check account statements for the last year as well as your credit card records. You need to do this so that you don’t omit sporadic expenditure (every three months or yearly).
Tips On Budgeting Four – Now Make Your Budget
Use the first column of your worksheet to record your income at the top and then below list all of your regular expenditure. As well as the most obvious payments such as mortgage, electric and gas bills, loan repayments and so on list all of the cash payments that you make regularly like commuting, coffee and lunches, eating out and mobile phone top ups.
Tips On Budgeting 5 – Positive Or Negative?
After you are sure you have recorded everything then you are ready to tally up everything and calculate if you have a positive cash result at the end or a negative one. Many of you will end up with a negative balance which shows you are spending more than you earn. If you find yourself in this situation don’t worry. The truth will set you free.
Tips On Budgeting Six – Examine Your Expenditure
Carefully look at all areas of your expenditure. Do you think there are items you can eliminate or reduce your spending on? Without a doubt there will be. Dining out, buying newspapers, coffee everyday, extravagant purchases, too many cell phone calls, using cabs where you should have used the bus or subway, hopping in the car for short journeys when you should have walked or used cheaper means to get there, the hundreds of cable or satellite channels that you subscribe to and rarely watch – the list is endless. Set yourself a target to drive out all unnecessary spending – don’t go for 30% go for 100%. Even if you don’t meet this target you will be surprised at how much you will save over time.
Tips On Budgeting Seven – Keep It Up To Date
There is no point in creating a budget for one time use. You must update it regularly with items you have forgotten, unplanned expenditure, increases in income and so on. You can also use it to control future spending. Try this technique – work out what your weekly expenditure needs to be in terms of groceries, commuting and cash payments and then withdraw exactly that amount of cash at the start of the week and use it. You will likely find that you will eliminate even more unnecessary items as it will be really painful to part with the cash.
Tips On Budgeting Eight – Plan For The Longer Term
Another advantage of having a budget is planning for your future. You can schedule expenditure for savings, retirement plans, future vacations, next car purchase, next home purchase, putting your kids through college and even a second honeymoon. Whatever your dreams for the future are you can plan for them with a well thought out budget.
Tips On Budgeting 9 – Why Not Improve Your Income?
Don’t only concentrate on reducing expenditure, but consider how to improve your income. There are a multitude of ways that you can achieve this – work overtime, another part time job, have a yard sale, sell all the items you no longer require or need on eBay or start a home business. By concentrating on increasing your income then you will become so busy that time will not be available to visit the mall and waste your money on things that are not really needed.
Tips On Budgeting 10 – Start Right Now
You will experience an enormous feeling of relief and pride after you have constructed your budget and finally have control over your finances. Don’t be like the majority of people who are not in control and have no idea where their money is being spent. It doesn’t matter if your budget is negative, you now have the power to change the situation. These tips on budgeting will help you if you take action – so use them now!