Concocting a budget and savings plan to resolve household finances can be tricky for first-timers. It isn’t easy to toggle the check and balance system of monthly expenditures, and it is even harder to keep track of all the money trickling out of your wallet. Thus, there are nine key saving tips and steps to mapping out the perfect budget plan that might just stop any household finances from slipping into the red zone.
Saving Tip #1. Determine Your Income
Scrawl down your monthly income on a piece of paper. This provides the threshold of your spending limit for the month.
Saving Tip #2. List Your Vital Expenses
These are the items or services you cannot live without every month. This encompasses fixed bills such as credit card debts, mortgage, rent or loan payments.
Saving Tip #3. List Your Miscellaneous Expenses
Variable expenses incorporate secondary expenditures such as utility bills, food, medication, public transportation fees and even gasoline prices for your car.
Saving Tip #4. List Your Unimportant Expenses
Additional things such as a movie cinema ticket or outside meals should be taken into consideration. Take note of nonessential items and services that you tend to utilize on a monthly basis.
Saving Tip #5. Discover Extra Expenses
Browse through your checkbook or credit card bills to scour for additional expenses such as housing maintenance or even holiday plans that might have slipped past your guard. Although these extra costs don’t always worm into your budget every month, do take note that event seasons such as Christmas (which in turn caters to Christmas shopping) might cause a spike in your budget.
Saving Tip #6. Ascertain Your Total Expenditure
Once you have scoped out your entire expenses for the month, ascertain the cost of your expenditure and subtract the value attained from your gross monthly income. If you chalk up a black mark, then that’s a good sign in your future budget and savings plan. However, don’t slam the panic button just yet if a red mark flashes in front of you – negative values are normal if you’ve just taken the first step in fleshing out your new budget and savings plan.
Saving Tip #7. Review Your Household Budget
If you’ve hit the negative sign, snip out some nonessential expenses first. Look through your list and figure out what you don’t need – do you really require that fancy handbag while browsing through the store? Settle for something lesser if possible, and cross out unimportant items or services that aren’t crucial to your lifestyle.
Saving Tip #8. Salvage Leftovers
Once you’ve slashed out the nonessential items off your budget list, you should wind up with some leftovers. Cash in any leftovers into a savings account, money market funds or even a guaranteed investment. This will not only exercise some control over your spending habits, but it will ensure that your money is salvaged from unprecedented spending ventures.
Saving Tip #9. Follow Your Budget Plan
Once you’ve developed a comfortable budget and savings plan, stick to it at all costs. Being stingy now might just be your umbrella of protection on a future rainy day.
Old habits might die hard, but if you follow these nine simple steps above, you’re well on your way to crafting a budget and savings plan that might just squelch all your financial woes. So why not give it a try today?