Managing personal finances is a way of living. If you do not know the basics of saving money, you’ll end up with nothing at all. As a general rule, never spend more than what you earn. However, everyone is always having a hard time sticking to this rule. Here are some essentials and basic tips to help you with budgeting your finances.
1. Write it all down.
One way to determine where to spend your money is by writing down your monthly expenses and listing each according to priorities. For instance, monthly utilities and mortgage should be on top of your list. Food and education expenses should also go on top of the list. Always keep a list when doing the groceries to help you stay within your budget.
2. Saving should be a priority, not an option.
Most people only allocate whatever is left of their monthly salary as savings. However, to help you save, allocate a fixed amount of savings every month when writing down your monthly budget allocation. In terms of priorities, savings should come after necessary purchases, mortgage and utilities.
3. Arrange for automatic pay facilities.
If paying utilities, mortgage or loan is hard for you, sign up for an auto-pay program in your bank. This way, you won’t be tempted to spend the money meant to pay bills, loans or mortgage on other things or unnecessary purchases. It would also help to open an account in a bank that offers an auto-transfer facility from checking to savings account. No matter how small the amount is, you’ll be surprised with the accumulated amount after a year or two.
4. Spend on holidays and occasions modestly.
Holidays can sometimes leave us broke. Birthdays and other occasions can also add to the expenses, especially if we do not choose our gifts wisely. There are many gift ideas and gift wrapping tips that you can take inspiration from. Plan your menu for Christmas and other holidays well ahead of time so you can save up for the extra cost.
5. Discounts, coupons and sales mean savings.
One way to save on costs is to use discount coupons. Collect them when you find one in magazines and online. Take advantage of end of season sales, closing out sales and payday sales. Purchase necessary items in bulk. It can save you a few dollars if you buy frequently used items in bulk. Scout thrift shops, garage sales and flea markets for great finds.
6. Live Green.
Green living can help you save on utilities and be environment-friendly at the same time. Use LED lights with lower wattage at home. Replace appliances older than 10 years. Use natural light as much as possible to save on cost. Turn off and unplug appliances when not in used.
There are many ways to save money. Sometimes, giving up a habit can save you a few dollars. Some of the things you can give up or cut down include coffee drinking, smoking and alcohol. It will help you stay healthy and a few dollars richer at the same time.
Photo Credit: EnrichWise