Sure anyone can create a budget, but the trick is sticking with it, and tweaking as you go along to maximize saving and reduce spending. Here are five ways to be successful with your budget:
Track Your Spending
It really comes down to taking a look at every dollar spent throughout the month, everywhere from monthly bills to dining out. Circle what is not a necessary payment and figure out if it’s something that can be avoided. Add up the total and see what you could have saved versus was the purchase really worth it. You will be surprised. Knowing what and how much you are spending can also help you know if errant charges are made to your credit card and such. I’ve had hospital bills and identity theft items show up on my credit report, and it’s up to me to fix them. Learning how to remove inquiries from credit report scores can be a useful skill when running into these errant charges.
Direct Deposit into Savings
Contributions to savings accounts from your paycheck should be automatically deposited; otherwise it leaves it more likely that you will spend the money if it’s in your account. The more you are able to move the money back and forth the less you will get into a routine of savings.
Use Cash Instead of Card
When you use cash instead of a credit or debit card it makes you feel the cost of the transaction a little more with the actual money leaving your hand. With a debit card you can somewhat since it comes out of your checking account, but credit card, you can charge away and worry about it later. If you use cash, at least you can think a little longer if the purchase is necessary.
Do Not Live Outside Your Means
As you follow your budget and the month comes to a close you should have money left or at least break even at worst while still contributing to savings. If you spend everything and have to dip into the credit card, then you will need to either reduce your allotted money from one area or shift to another, or you are just overspending throughout the month and will have to reduce unnecessary spending.
Pay Down Debt but Build a Safety Net
The goal is to be debt free, but at the same time you need to save for a rainy day fund. Experts say that you should save between three to six months of living expenses in case of job loss or an unexpected bill. If you put all of your money towards debt and something does come up, you will have nothing saved up and it will have to be charged back on the card.