There’s no one right solution when it comes to creating a successful personal budget, but there are a few tricks that can help you take control of your finances. Whether it’s cutting down on the amount you spend on prepared foods, or limiting yourself to one emergency credit card, there are many things you can do to develop a better budget.
Use these five easy steps to better budgeting, and you’ll be on the right track in no time.
1. Know where your money is going.
The first step to successful budgeting is to understand exactly where your money is being spent. Before you start to consider where you can cut costs, take a look back at your previous expenditures over the past six months to a year, and determine where most of your money is going. Figure out the difference between your fixed expenditures and the fluid money that you’re spending on entertainment and lifestyle activities.
Once you have figured out exactly what your expenditures are, you can set your budget — and stick to it.
2. Prepare your food and beverages at home.
By now, everyone has heard advice like this: “Prepare your latte at home in the morning to save thousands of dollars by the end of the year!” Cutting out your favorite coffee shop frappuccino for a homebrewed cup of Joe can really help you save some serious cash. Prepare most of your morning beverages at home, and splurge as a special treat only. You can also ask for coffee shop gift cards for a birthday or holiday present.
You can also save a lot of cash by not purchasing prepared foods. For example, if you guy a bag of chopped up vegetables instead of whole raw veggies — you’re paying a markup for the food preparation. This holds true for prepared meats, lunches and dinners. Do the prep work yourself and save big.
3. Have a goal or deadline in mind.
Having a goal for how much you want to save, whether it’s monthly, yearly or even weekly, will allow you to keep yourself focused on saving money when tempting opportunities arise. If you know it’s not going to last forever, you’ll be more likely to stick to your budget than to make a lavish decision.
4. Take the time to comparison-shop.
Whether you’re looking for something big, like a new kitchen appliance, or something small, like a new T-shirt, comparison-shopping can save a bundle. Grocery stores, department stores and furniture stores alike all offer different benefits and pricing. Don’t make a purchase without doing some research first.
5. Talk to a financial counselor.
If you’re really serious about budgeting, speaking with a financial advisor or counselor could help you make your financial planning more effective and efficient.
With these 5 easy steps, you can be on your way to better budgeting in no time.