09 September 2014

Financial Success: Living on a Budget Pt. 2

RALLYPOINT STAFF:


So you are ready to create a budget and become one step closer to reaching your financial goals.  When you have a budget you can keep better track of where you are spending your money. That $2 dollar cup of coffee you get everyday before work adds up to be $500 dollars every year. This is where a budget comes in handy. It forces you to look at where you are spending your money and how you can better spend and, most importantly, where you can save.

Here are tips on living life successfully on a budget:

Get Started: You have to start somewhere, so make a spreadsheet. This will help you keep track of everything and give you a reality check by looking at the hard numbers. You want to include your take home income along with your spouse’s. Next, outline your fixed costs: mortgage/ rent, car payments, cell phone bill, cable, internet, student loans, utilities, etc.

Look at Your Variable Expenses:  Eating out, gas, and shopping are all considered variable expenses. Keep all your receipts , so can see how much you spend and set an amount you can stick to. Eating out all the time or constantly shopping means less money for you to save. 

Weave Your Safety Net:  You want to build up an emergency savings account to cover unexpected expenses, which will happen. Treat it like a bill, so every month you add $100 dollars  (or another amount) and watch it grow. With this, you won’t have to scramble when your car totals or when your child needs braces.

Get Creative: Use any way to help yourself save, even for smaller purchases.  One way is using envelops--write what you are saving for, such as that special set of golf clubs, and every paycheck tuck a little money into them. Sometimes it is easier to save money when you have a tangible goal.

Break Up the Bills:  Another great thing about having a budget is you can keep track of your bills and when they are due.  Have a lot of bills due at the end of the month? Try splitting them ahead of time. That way, you have steady payments instead of all at once. This is a great option to prevent yourself from outspending when bills aren’t due.

Pay Down Debt: Interest will only build up if you don’t pay off your debt. So focus making larger payments, so you can fight those interest rates. Once your debt is gone, it’ll be a lot easier to save.

Share the Responsibility: Get your spouse on board with budgeting. It’s a lot easier as a team, and you can keep each other in check when it comes to spending.

Set Limits: It’s hard, but set a limit  on what you spend for birthdays and holidays. Focus on few, well-thought gifts and combining it with sales, rather than on quantity.

Separate the Money: Sometimes making your money more out of reach is the best way to get used to saving. You want to make sure that the money is not in your checking account. Most banks will let you have multiple savings accounts, but just having one is enough.

Tighten Up the Belt: Once you’ve tracked your expenses, you can start analyzing what you spend on. You can always find ways to cut costs. You can limit how often you go out to eat. You can buy fewer groceries if you find yourself throwing food away. If you find you can’t resist a good sale, then don’t put yourself in situations that’ll tempt you.

Remember, your budget is for you and you are allowed to change it. You might have to play around with it at first and in time you will learn how to better manage your money.  Always remind yourself why you are saving and what it will do for your future. Keep yourself motivated, and budgeting will become easier over time.

How will you get started with budgeting? What tricks do you use to help yourself save money?

Comment below or join the discussion here and connect within the military community.

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