How good do you think you are with your money? If you are good then it means that you’re also familiar with budgeting and saving money. If not, then you have come to the right place. Here are some tips for you to follow if you want to budget correctly:
Tip 1: Keep Track of Your Monthly Income and Expenditures
First of all, you need to have an idea of your monthly income and expenditures as it can help in creating a money-saving budget. From electronic or paper bills, receipts to bank statements, gather all the record of your income or expense for at least a month. Now that you have the record, it is time to start budgeting.
Tip 2: Create A Budget Worksheet
You can either use an Excel spreadsheet or even a paper to create a budget worksheet. Make sure you list all expenses (rent or mortgage, utility bills, installment loan payments, credit card payments, etc.) and also list all income after taxes. Now add up all the figures and subtract the expense total from your income total. If you get income total lower than your expense total, then you need to make changes to save money.
Tip 3: Use the 50/30/20 Budget Rule
You can actually budget efficiently with this rule. According to this rule, you should spend 50% of after-tax income on housing, groceries, basic utilities, transportation, and other necessities. You should spend 30% of your income on whatever you want. The remaining 20% must be used on paying down debt or saving money. You can make some tweaks in it if you want to focus more on paying a debt or saving money.
Tip 4: Reduce Spending
Now that you have created a budget, it is time for you to make small changes on how you spend your money. For instance, do you really need a 150mb internet package when a 100mb package would do just fine? Instead of an expensive vacation, why not spend time with your friends and family. There are lots of ways in which you can actually save money.
Tip 5: Use Budget Apps
Thanks to technology, budgeting is made easier for people. All you have to do is download a budget app and link it to your checking and credit card accounts, and let the app do its work. The app not only tracks your spending and lets you know how much you’re spending, but it also generates a monthly report of your spending. Budget apps come with many features to help you spend money where it is needed the most.
The Bottom Line
Creating a budget is important but making it work is the real deal. If you want to save money, then start living frugally. You can do it with little things such as unplugging electronics, buying groceries in bulk, skipping drinks, eating at home more often than going to restaurants, etc. In a nutshell, just set a budget and stick to it!