Money Management Tips ? How to Budget Like A Pro

Posted by jenniferarmins1 on December 22nd, 2018

Budgets are a vital key to managing your money. Creating a realistic budget and sticking to it will allow you to pay off debts, save money, and change your lifestyle for the better. Here are a few tips to help you start budgeting like a pro!

Creating a Manageable Budget

1. To make your budget as realistic as possible you need to know where your money is going every month. Gather or print out your primary checking account statement for the last three months. Go through each statement line by line and evaluate your total costs for each category over the three months and take the average to show your realistic monthly budget for that item. Eg: Over 3 months you spent 0 in gas so your realistic monthly budget will be 0 for one month. Use these Categories

•          Housing (rent/mortgage, maintenance, insurance)
•          Utilities (Electric, Phone, Water, Trash)
•          Food and Groceries (Food would be restaurants, coffee houses, etc. whereas Groceries are purchased food that you prepare in the home)
•          Personal Care and Household(Gym memberships, personal hygiene supplies, prescriptions, hair salons, pedicures, laundry detergent, cleaning supplies, toilet paper)
•          Debt (credit cards, student loans, car payments)
•          Other Essentials (car repairs, gas, health insurance, day care, vet bills)
•          Entertainment (movies, rental movies, vacations, night out, bowling)

Related: How to Stretch Your Food Dollars Today

2. Now that you know exactly what you spend on each category for one month step back and evaluate your costs. Where can you cut money from your budget? Can you switch cell phone companies or limit yourself to only dining out once a month? Set a few goals on where you would like to save and add them to your new monthly budget.

3. Know your immediate goals. If you are trying to pay off your debt then add that into your budget. Don’t put the minimum monthly payment in your budget. Put what you want to pay each month. If your goal is to save money, then decide how much you want to put aside each month and add that to your budget. Treat these like bills that must be paid.

4. Always start your budget before each month and be sure to budget every dollar that is coming in otherwise that money will disappear just as fast as it appeared. Have a plan for unexpected income. Say you receive four hours of overtime that you hadn’t planned on. Where will this go? Into an emergency fund, paying off a debt, added to entertainment budget – it doesn’t matter where you want it to go as long as it has a place.

5. Money management is very important to a successful budget. Track all expenses and spend time weekly to update your budget and see if you are still within your budget or if you have gone over. Evaluate your budget at the end of each month and adjust where necessary.

Related: Top 20 Travel Tips to Save Money

Lower Your Costs

There is always a way to lowering your costs. Here are some expert tips to help you adjust your budget and meet your money saving goals. Choose one budget item each month from each category to lower.

•          Housing: Mow your lawn instead of hiring a landscaper or find a house with lower rent.
•          Utilities are usually difficult to lower but not impossible. Research energy saving techniques to decrease the power bill, switch phone or internet providers, research other trash removal companies or options.
•          Food and Groceries can save you an extra 0 to 0 a month by changing habits. Make your own coffee, use coupons, shop at local produce stands, buy meat in bulk and repackage into individual meals, plan your meals, pack your lunch for work, only dine out once a month, the possibilities in this category are endless.
•          Personal Care can be minimized by canceling any memberships until your goals have been met. Change hair appointments to once every other month if you can. Buy generic soaps or once again use coupons and membership rewards.
•          Debt is best minimized by paying off loans and credit cards as quickly as possible but there are some other ways of lowering this cost. Debt consolidation companies are one.
•          Other Essentials can be decreased as needed as well. Research less expensive health care options. Buy pre-purchased gas cards that usually have deals. Buy worth and get an extra , join rewards programs or get safe driving discounts.
•          Entertainment is where you need to be the most cautious. Do not completely eliminate this category or you will become resentful towards the budget and have a tougher time sticking to it. Limit yourself to one night out a month but plan for small rewards like a movie night or go out for ice cream. Make sure you have a little something to reward all of your hard work.

Conclusion

The key to having a successful budget is to know exactly where your money is going, save money first, pay off debts, and above all else make changes and adjust accordingly to stay organized and take control of your personal finances.

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