We take a look at some easy ways to manage your money better.
Budgeting is the best way to manage your money and save more. Just making the decision to be more intentional with how you spend your finances is a huge life changer.
Unfortunately, this term – budgeting – has gotten a negative reputation as it has been made out to be a lot more difficult than it actually is. Making a budget is basically about having a plan for how to spend your money, that's all, nothing more to it.
Simply doing this takes away any guesswork, helping you get a clearer picture of your earnings, spending habits, save a lot more, get out of debt, hit whatever goals you want and give you more freedom with your money. This is the best thing you can do for your finances. Ready to do this? Here are seven practical tips you need to become a pro at budgeting:
Get a budgeting app
Thanks to technology, you no longer need to pull out receipts, put down figures in order to assess your income and spending in painstaking detail. You now have personal finance apps to help you out.
With these helpful tools, all you have to do is key in your information, desired goal and the app handles the rest.
Make a plan you can stick to
If you prefer to do it manually, you should start with the most important things like noting down your savings followed by food, transportation, utilities (electricity, security, water, garbage, data), and toiletries. Once these necessities are taken care of, you can add others like money for your hair, pedicure, and entertainment to your budget.
Figure out your goals
Goals like paying off a debt, moving to a new place, buying a car, getting married are very important as they help you stick to your budget. Once you figure out your way, it becomes a lot easier to follow your plan.
Your income might be the same but every month has different requirements. For instance, you probably need to save more money for gifts in the months leading to December or save up for your rent before its due.
This would mean adjusting your budget for the month when it is required. This flexibility will save you from being stressed.
Have emergency funds
It is extremely important to always keep money aside every month for unexpected expenses. This is separate from your savings. It could be for anything from replacing your phone screen to medical care. Label these funds as miscellaneous in your budget.
Always use cash
Being committed to your budget means ditching your ATM cards and stick to just cash. Once you know how much money you need for food, for instance, withdraw the exact amount budgeted for that category.
Using cash helps you be more mindful of your spending as you have no choice but to stop spending as soon as the cash runs out.
Give yourself a break
It takes a while to become a pro at budgeting so give yourself a break if you are unable to stick to it throughout the first month or even the second one. Just keep at it, you will get there eventually!
Source: BUSINESS INSIDER