Do you end up taking out title loans again and again? Many of us don’t know the first thing about how to put together a budget. We often just live from paycheck to paycheck, and everything seems fine until our careless spending catches up with us. Not having an emergency backup savings can be disastrous, especially when an unexpected bill comes our way.
It’s always those unforeseen expenses that leave us broke and scrambling for a way to get our hands on emergency cash. So how can someone with no experience with budgeting or finance learn the secrets of fiscal security? Have a look at what these top industry financial experts have to say about easy ways you can budget your income so you don’t have to rely on short-term loans to get by.
Longtime queen of the budgeting scene Suze Orman advises that you set aside at least 10% of your monthly income to achieve both long and short-term financial stability. Doing so will help give you and your family an edge because you’ll have a nice financial cushion to fall back on in case of emergency.
Ten percent may not seem like much, but that’s what makes this such an easy rule to follow. Ten percent saved up over a month isn’t a whole lot, but ten percent saved up over the course of time can amount to a tidy sum. If you need it, it’s there, and if not you have a good head start on retirement.
Just about everyone has heard of Dave Ramsey and his belief in debt-free living by now. One of the areas of our budgets that he believes we often overlook when searching for ways to save is our grocery bill. It’s a common mistake, and one a majority of beginning budgeters makes.
Whenever we sit down to go over all our bills, the money it costs us to eat is often overlooked. Your food bill is probably one of the largest monthly expenditures you have after your mortgage or rent. By cutting the cost of feeding your family by cutting waste, eating out less and finding the bargains, you free up money from your food budget that could go into your emergency fund, which Ramsey recommends be at least $1,000.
Budgeting guru Ric Edelman’s advice for saving relies on examining your past behaviors to help you prosper in the present and plan for the future. Edelman advises first-time budgeters to look back at all of their spending from the past year to determine where their money is going.
By doing so, it is easier to spot waste, bad habits, areas to cut and ways to save more money. By examining your spending from a distance, you gain a new perspective on the patterns and behaviors you may not notice from month to month. It’s a common-sense move that could help you avoid debt from an unexpected expense.
Canadian financial expert Gail Vaz-Oxlade suggests using what she refers to as “magic jars” to specifically budget money for entertainment. This includes eating out, going to the movies, vacations and even buying clothes. By allocating cash to a jar specifically designated for entertainment, you won’t ever need to worry about leaving yourself short for necessities.
By limiting the amounts you spend on fun and entertainment, your bills will be paid on time and whatever you have left can be set aside for a rainy day or retirement. It’s an easy budgeting tool that nearly anyone can work into their budget, and all you need is a jar and a little self-discipline.Blog Image
You’ve heard what the experts think. Now go ahead and try putting some of these simple budgetary strategies into practice. Don’t try to implement all of these ideas at once - just pick the one plan that makes the most sense to you and run with it.
Once you’ve got a better sense of how the strategy you choose is working for you and your budget, you could try to add some ideas from the other experts to find a combination of financial practices that turns you into a lean, mean saving machine. Once you get some distance between you and financial vulnerability, you’ll see saving from an entirely new perspective.