Most people who survive on monthly wages run out of it by the end of the month and have no clue as to what they spent it on. They are unable to set aside money to make big purchases or save for college fees. They often find themselves low on cash and tread over it when it all goes away.
Although budgeting can seem like a challenging task to do, it is a process that helps you plan out your expenses of the entire month and take out money for saving.
If you’re from the norm that receives a monthly wage, then the following tips will prove you beneficial for planning out an efficient strategy for your money.
Make a Follow-able Budget
Using ready-made budgets or trying out steps listed online won’t help you in the least as they can seem hard to follow. Plan a budget for yourself that isn’t unrealistic. Creating too many limits in spending can leave you in a trance. Goals that are too far-fetched can get you depressed and want to leave the idea altogether. For formulating an easy-to-follow budget you can look through your previous spending habits to come up with a plan for you to spend less.
You can do it using technology and software like spreadsheets or apps that make budgeting easier. Or you can craft a list on a piece of paper to hang it in a place where you can see it often.
Include Every Expense
For knowing how much you’re going to spend, you should be aware of the expenses you make every month. There are several basic things that you spend money on each month including food, rent, transport, clothing, school/college fee and so on.
Each family has its spending habits and saving needs. Note your every need and don’t leave anything behind. Keep your monthly salary in mind and list expenses down to zero. This way you’ll know where all your money goes without overspending a penny.
Add Purchases for Occasions
Once you’ve compiled a detailed list of every daily, weekly and monthly purchase you make, you can write potential expenses to be made in a month or year. Occasions like birthdays, anniversaries and Christmas require you to spend a significant amount of money. Not planning and saving for them beforehand can make you feel overwhelmed and can have you become low in cash for basic needs. Be sure to include these expenses in planning your budget as well to be able to spend sensibly on occasions and save as well.
Keep Track of Money Spent
When budgeting, it is crucial that you know exactly where you spent your money and how much. You can collect bills and receipts form different expenses. Carry a notebook or write them down on your mobile phone. You can check the history of your costs through your credit cards. Transactions made through a free money transfer app can also help in knowing exactly how much you spend and where. Through these approaches, you can see where you have spent the most money to help cut down to spend on useful areas and save.