How To Successfully Budget Your Money? Taking control of your finances is more important now than ever, but what is the best way to do this? How do you set up a budget, let alone stick to it to see results? Below are tips to help you successfully create a successful money budgeting system.
We know it can be intimidating to go through your bank statements and understand where your money is coming in, and where it is going out. This is an incredibly important step when it comes to budgeting. If you don’t know what is coming in, you won’t know what to allocate to come out.
Start by calculating and figuring out your monthly income. Next, calculate your monthly expenses, this means rent, debts, food, services, fun, everything! The end goal is to have more money coming in than what is going out.
This might not be what you want to hear, but it might be necessary. If you’re spending more money than you’re earning you probably need to cut down on something. Your savings will never have the chance to grow otherwise.
When going through your bank statements see where you’re spending the most money.
If you’re getting food deliveries 3 times a week, maybe this is something you can cut back on. Delivery prices add up and before you know it you’ve spent hundreds of dollars purely on delivery fees. Say you spend $10 a week on delivery 3x. This adds up to $30 you could allocate to somewhere else in your budget, potential savings!
If you’re new to budgeting you might not have heard of the 50/30/20 rule. This is a great place to start for budgeting beginners.
This is the breakdown of your income.
Now, this might not be doable for everyone, and we understand that. Some people have no choice but to spend more than 50% on their needs, while others might get away with spending 30% on their needs. This is a general rule of thumb to follow for beginner budgeters. Since your bank statements are already out, allocate each transaction to one of these sections and see what your real percentages are.
If you go hard into budgeting, you’re probably going to fail. Don’t suddenly cut back everything. This is similar to a diet, going from eating whatever you please to vegan overnight, probably isn’t going to last long. Cut back slowly, go from 3 Takeaways a week, to 2. and so on until you’re happy with the amount you’re spending on this one area.
This can be very intimidating and overwhelming but it will help you understand your spending. Take a week and write down every single thing you buy. Whether it’s $40 on gas, $2 for a donut, or a shopping spree of $350. write. it. down!
Knowing you have to write down every purchase and then add up your total at the end of the week makes you think more thoroughly about the purchase you’re about to make.
This can be a very satisfying process, whether you print off a savings coloring sheet and color every $50 saved, or just type everything into an excel spreadsheet. Budgeting and saving money becomes addicting, if you saved $50 this week, can you challenge yourself to save $60 next week?
Why not set a goal why you’re at it. Save $50 every week for 2 months and you’ll have $400. Keep this hard work up and continue saving, or reward yourself with a night or two in a hotel.
Budgeting is seen as a restrictive thing when it really doesn’t have to be. Budgeting doesn’t mean you have to cut out everything you love from your life. It just means you understand your cash flow and are smart with your money.
It’s important to know how much money is coming in and how much is going out. Otherwise, you’re managing your finances blind and you’ll never get a strong understanding of why you don’t seem to be able to save! We hope you learned something from this article “How To Successfully Budget Your Money?” Good luck!