Do you suffer from that common affliction known as “too much month left at the end of your money”? It’s a problem known to far too many Americans, yet solving the problem is not taught in any school anywhere, and even outside of school, it’s hard to find a way to learn since so many advisors seem to contradict each other. There is good news in all of this since this article will give you five easy ways to manage and save your finances. Heed this advice and reap.
1. Make a budget. See? You’ve only seen one word, and you have already cringed. But don’t feel bad. Most people do cringe when they see the word budget. Fortunately, as cringeworthy as the idea is, it’s loaded with power to turn your financial life around and get you back on the right track.
Simply stated, a budget is a hard copy look at your entire financial picture, from beginning of the month to the end. In the beginning, you want to sit down and prepare a plan for how you will save and spend all of your money. Then, whenever you spend money or receive money, you report the amounts to yourself under the categories you have budgeted to. Finally, at the end of the month, you make sure that you has spent and saved what you had planned. If you end up within the guidelines of the budget you set up at the beginning of the month, you’ve done well.
2. Manage your spending. When you set up your budget, you need to determine how much money you plan to set aside for savings and what you need to spend money on during the month, and in that order. If you spend less than you had anticipated in your budget, you are doing well. Be sure to include everything and miss nothing. If for example, you need to buy office supplies at Office Depot and OfficeMax,make sure you include any coupons and promo codes that you used to save money, and include this in your budget.
3. Create your budget. In step one, you created a draft of your budget, then above you recorded your expenditures. Now it’s time to start recording, on a daily basis, what you spent your money on during the month.
a) Note down the date
b) Note down all in incomings and outgoings
c) Workout the difference
d) Make sure to equate what you need to realistically live on many people forget to do this!
e) After this do some basic maths and you’ll see what you should save a month.
4. Be honest. A huge mistake that many people make in preparing their budget is their “fudge factors,” which might be considered humorous, but in reality, it’s only cheating yourself and allowing you to stay in the same situation you are trying to get out of. Stay unmercifully honest.
5. Watch your financial health over time. Plotting your financial habits is great, but when it is done for a month it is of little value. What is of great value is your ability to stick with budgets over periods of months and watch your financial health improve over time. It’s important to understand that having a budgeting habit can help you in a lot of ways. Since it’s on paper, it can show you where you have made mistakes in spending and where you can improve in the next month. Over time, it will show you how much progress you have made to get you where you want to go.
