How much money do you spend every day? If answering this question is difficult for you, and money is constantly not enough, then it is time to change the situation. It’s time for budgeting.
Little things do important and every point matters. How many times a week do you have lunch outside the house? How much do you overpay for a TV that you don’t watch? Do you know how to take advantage of loans? It may really seem to you that you are doing everything right, but there is no limit to perfection.
Here are some useful tricks to help you improve your financial situation.
- Keep Records
You may find this boring, but recording your expenses is important and necessary. The habit of conducting bookkeeping will help you determine the most frequent and costly items in your budget.
For these purposes, you can even use applications on your smartphone. Applications of this kind are always at hand, they are easy to synchronize with a laptop or even phones of your family members. This way you can keep your overall budget together.
- Fixed and Variable Expenses
Think about your needs. Some of them are basic, and some are secondary, meaning that it is very simple to do without them. The basic needs and the funds that you allocate to them should always be in the first place, fixed (food, transport, health).
What we put in second place is a variable cost. In a specific month, you may just reduce these costs if you lack money (entertainment, shopping). The quality of your life will not change significantly without them.
- Set Limits
Every month, plan the minimum and maximum amounts of money that you are willing to spend on a particular expense item. Stick to your limits! Take time to control your budget and keep track of how much money you have at the moment.
But no one is safe from unplanned expenses. In such cases, there are many other options. For example, you can borrow money from friends or use loans online. Borrowing should be a last resort, not an ongoing practice. And keep in mind that responsible borrowing is the only way to take advantage of loans.
- Think About Savings
When you focus only on spending, you use an unsafe approach. It is savings that are the key to your peace of mind. Money can come in handy in the future for large purchases, repayment term spending or simply as a financial safety cushion.
Food with you, and not in a restaurant, a book from a library, and not from a store seems to be a trifle… But as soon as you begin to keep records of each item of your expenses, you will see how much these trifles mean in total. Save every time you have a moment because money is the answer to 99 out of 100 questions.
- Stay Out of Debt
Debt is an expensive and thankless task. You are dealing with high interest and an ever-increasing amount of debt. The faster you manage to close the debt, the less money you lose. Credit card interest is expensive too. So, try not to use them at all.
According to the statistics, renewable credit card debt can make you pay an average of $1,141. Think about it, because you can spend this money in a much better way.
- Spend Less than You Earn
Continuing the topic of credit cards, it should be said that they are often used by people who have the habit of spending more than they earn. It’s one thing when you resort to the help of special services that provide loans, as emergency financial assistance tools. Another thing is to live in constant debt.
Even if your income is above average, living beyond your means from time to time will make you experience a constant lack of money. Try to manage only the money that you really have. You will always be in a winning situation.
- Use Cash and Think About Every Purchase
Spending cash is psychologically more difficult than spending invisible electronic money. You literally see when your wallet is empty. It also helps to clearly understand how much money is still available for day-to-day running expenses.
With electronic money on a card, it is very easy to lose control. Your expenses must be conscious. Sometimes it’s really better to postpone the purchase until later, to find options. After all, sometimes low-quality goods are behind discounts, they simply need to be urgently sold to impulsive customers.
We live in a world of temptations. Do not fall for advertising and discounts. Think about every item of your spending, especially a variable one.
Are you sure you need this thing at the moment? Are you sure that you will not find the same one at a better price? Give yourself time to think, it will save you a lot of money.
Sometimes it is very difficult to limit yourself to one or another thing. But few people want to suffer in anticipation of receiving the next salary. It is very important to constantly monitor your budget, pay bills on time and not have to deal with interest on debts.
Live within your means, save and let money bring you only joy.
Author bio: George Reed is a financial writer who helps people learn more about personal finances, installment loans and get the most winning offers from lending companies.