begginer budget

 

Starting a budget.

 

Having a budget is an important part of maintaining financial security. It’s
important to control spending so there is enough leftover to put towards the
larger things we need or want.
Even if you have never thought of planning out a budget, it’s not too late
to start. I’ve put together some tips easy enough for anyone to get a start
on their household budget!

 

The first step is to calculate all of your monthly income. Add up any income
you receive from your job, spouses job plus any other extra things you do
monthly that brings in money. Once you have your monthly income total,
you will need to write out all of your necessary bills that are due each month
and total them up. (Rent, Utilities, Car Payment, Insurance etc)

Next, create a list of your luxury items that you buy each month on average.
This may include dining out, trips to the movies, coffee each morning, purchasing
DVD or Music Cd’s etc.

 

After you have totaled your spending for the month, you should be able to subtract
your spending total from your monthly totals to get your leftover balance each month.

 

You may find, as many people do, that after you have reached this step of planning
your budget that you have very little, or no money left each month. Some cases, you
may actually see a negative balance meaning you overspend your income each month.
This can be very stressful but easy to do when you don’t have a written budget to
follow. If this is the case for you, let it be a wake up call. There are ways to
turn it around and actually start to see more of your hard earned money each month,
you just need to be aware of where your money is going!

 

Now that you have a good look at your money. Ask yourself this question, If you had
some money to put back and save each month, what would you be saving it for? A new
appliance? To pay off a credit card? Down payment on a home? New Car? Vacation?
No matter what it is you are wanting to save for, you can do it if you make and stick
to a budget!

 

Let’s say you will be needing a new washer and dryer soon and you are looking at
a goal of saving $1200 for this purchase. First thing is to estimate a time frame
in which you would like to make this purchase and then break up the smaller amounts
you will put back and save however is easiest for you – Monthly, bi-weekly, weekly.

 

So if you wish to have your $1200 saved in 6 months, you need to plan to save $200
each month, or $50 each week.

 

Where do you pull that $200 each month? Well if you have a budget, you know your income,
you are aware of your spending and how much is left over each month. You will need to
budget out the extra $200 from your monthly “leftovers” If you don’t have an extra
$200, you may want to take a look and see if there are any luxuries you can do without.

 

For example, if you are in the habit of grabbing coffee every morning before work,
try cutting it down to two mornings. If coffee is a must for  you, invest in a
travel mug and give the easy coffee mix-ins a try a few mornings of the week.
This will help shave $40+ a month off your budget! That’s nearly $500 a year!

 

Some other ideas to get your current bills lower are:

-Call your cable and/or internet provider to see if they have any specials to lower your
monthly bill. Another possibility is cutting out the cable all together and getting a membership
with Netflix, they offer many popular TV shows and tons of movies for a low monthly fee of $8!

 

-Try lowering your thermostat a few degrees in the winter and raising a few degrees in the
summer. Also make sure your water heater is set to a normal level ( around 120 degrees) and
make sure to keep your air and furnace filters replaced and clean. All of this will help to
lower your utility bill each month.

 

-Look for sales and use coupons at the grocery store! This is my favorite way to stretch
our household budget! Once you get the hang of couponing and when to buy items at their
lowest price, your grocery bill should be 40 -50% less than what it is now! To stretch that
even further, make your meal plans based around only the things you are getting at a great

 

After you have decided the items you would like to cut out of your spending each month, you
should have a new total that looks a little better. Hopefully there should be some extra money
left over that you can decide what to save for.

 

Best way to handle your money:

Some people prefer the cash only system. File your money in categories and put each in an
envelope. For example if you plan to spend $75 on groceries each week. Make an envelope labeled “Groceries” and put your cash inside. Each time you make a grocery purchase that week, the money should be coming out of that envelope only. Once it’s gone, it’s gone! Don’t dip into other envelopes to make more purchases. Having your funds in cash helps you to know when you are close to running out and studies have shown when people pay with cash they think harder about whether making the purchase is really worth it.

If you plan to use your financial institution to make all your payments via check, debit card,
Mint.com is a fabulous way to help budget and keep track of your spending! Best of all it
is completely free! Manage your bank account and spending easily. There is even a
mobile phone app to download for free to check out your spending on the go.

 

Don’t be too strict

A very important tip for any household’s budget is to allow a place to splurge a little.
If you keep a strict budget with no room for unexpected expenses, errors or a little fun
money, then you may end up having to pull from other important areas of your budget and
feel as though you failed. Allow room for a little fun. It will help make saving less painful
and keep you on the right track.

 

Whatever your savings goal is, make it reasonable. If it’s something very hard to reach, you
will find yourself giving up before you even get started. If you have many things you would
like to save for, start with the smallest priced item. You will reach it faster, and have
that motivation to move on to the next goal with a little more confidence of reaching it.

 

If you are living paycheck to paycheck and feel you are barely getting by and strapped for
cash, there are some ways to earn money pretty effortlessly each month. Just remember, whatever extra side job you take on or look into, You should NEVER pay for any of it upfront. You will notice on your quest to work at home or earn extra money there will be many scams. If any of them ask for money to get started, it’s a scam. Everytime!

 

Ways to boost your income:

-Take on a part time job

-Babysit

-Take online surveys (see a list of companies I use)

-Have a yard sale

-Offer services for something you are good at – computer work, yard work, Piano lessons, Web

design, Photography etc

- Clean houses

- Sit with the elderly

- Be a mystery shopper (Remember if they ask for any money to get started, it’s a scam!)

- Sell some of your unwanted items on Craigslist or Ebay

I hope this post gives you the motivation and starting point to get your
household budget underway.
What other tips do you have for sticking within a budget?

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