Setting a Budget and Sticking to It
Even if your budget is perfectly planned out, it’s not always easy to stick to your limits. Life is unpredictable: you could have to use more money for fixing your car or an unexpected doctor’s visit. These small hiccups can throw you off balance and make you forget about saving money.
In order to stay on track, you need to set realistic goals for yourself. By setting yourself up for success, you won’t become discouraged when things don’t go as planned. Here are some tips on how to create a fair budget and stick to it.
Calculate Your Income
To get a better idea of your resources, compile all your revenue streams to see how much money you earn monthly. This includes your day job, any side hustles you may have, or any donations you receive. If you receive alimony or child support, factor those in as well.
Calculate Your Expenses
Next, determine how much money you must use each month. It’s easy to pin down fixed payments, like electricity bills or car insurance. Whatever’s left over can be used on groceries and other basic needs. You may also want to make allowances for monthly dinner dates or movie nights.
Track Your Spending
This will help you stay accountable and keep overspending at a minimum. Writing down every purchase you make can be annoying, but it’s the key to long-term success. If you have trouble remembering to write things down later, download a money tracking app for your smartphone. This way, you can record the transaction immediately.
Most people are usually trying to save money to reach a long-term goal. This could a dream vacation, a brand-new car, or a down-payment on your first home. It’s a big motivator to be frugal when you know there’s a nice reward at the end.
For more tips on how to set a personal budget, please contact us for additional information.