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Basic Budgeting Practices You Should Be Using

December 21, 2018 | By Mason Roberts

There are simple rules to follow when it comes to creating and sticking to a budget, but they’re not as difficult to follow as one might think. Budgeting by definition is the act of controlling where your money goes. It’s a practice that takes time to master, but by exercising a little self-control and having as plan in place, anyone can take control of their financial situation. When living on a budget, you can avoid the need to search for a title loans near me every time you are facing a financial emergency. Here’s the four budgeting basics that can help you take back control of your finances today.

Determine Where Your Money Needs to Go

Sit down with your monthly expenses and compare them to your monthly income. During this process you can begin to recognize what monthly expenditures could be trimmed or even eliminated, freeing up more money for your fixed expenses like rent, utilities and car insurance. After doing this, you should have a pretty clear snapshot of how much money you have to work with for your budget.

Start Off Small

You don’t necessarily need to include everything in your budget from the get go. If you feel intimidated by the idea of a creating a comprehensive budget, choose a smaller area of your expenses to start with, like budgeting for meals. Rather than going out to eat for lunch every day, give yourself a set amount to spend on these meals throughout the month. By packing your lunch a few days a week, you will quickly see the financial benefits and potential savings from even the most basic of budgeting.

Monitor Your Budget

Check on your budget on a weekly basis. We keep track of everything else in life like friends, dates, appointments and so on, so why would you spend a few minutes a week to keep track of your money? Set aside a time of the week where you can sit with your account statements and make sure everything is where it needs to be. This simple investment of your time will help you determine if you’re still on track or need to reign in spending in any part of your budget. You will also have a better idea of how much money you can afford to spend on things like entertainment and food until your next payday.

Think Outside the Box

Budgeting doesn’t mean going without. It’s simply keeping track of your money, knowing exactly where it goes and cutting your overhead to have more cash in your pocket at the end of each month. You can do this by simply making some changes to the way you shop for necessities, like swapping out the more expensive brands for a cheaper store brand. Even settling for a small coffee instead of a large, or even better bringing a thermos from home. Believe it or not, these tiny changes can have a substantial positive impact on your finances over time.

Now that you have an idea of how to take the first steps of creating a basic budget, it’s time for you to take control of where your money goes and design a financial plan that works for you. Keep in mind that no two budgets are the same, so do whatever works best for you and your individual circumstances. The ultimate goal is to come up with a plan that will ensure you are building a safety net of savings to relieve the pressure and uncertainty that comes with living paycheck to paycheck.

Budgeting for the first time is a process, so don’t expect it to be easy in the beginning. However, it will definitely get a lot easier with time and you’ll thank yourself down the road when you have a nice nest egg put aside for retirement.