Everything costs money these days – finding a way to survive without spending money is increasingly difficult. If you’re not careful, your income can quickly dwindle and the little money that’s left over will go to paying off bills and buying food. But if you take the time to plan ahead, budgeting is simple, and can help improve your quality of life and mental health. Here are some tips for getting started.
Track Your Income
The first step is to track your income. It’s not enough to know how much you make in a year, because that won’t tell you when the money comes in or exactly how much of it goes out before you see it again. Think about it this way, if most of your income turns up right around payday, but there are a few big payments that come in earlier and then a couple of small bills that come out right before payday, you’ll end up broke and frustrated by about Wednesday.
Keeping track of your expenses can be a difficult at first, but if you persevere it will soon become an ingrained habit. A simple spreadsheet and notebook is usually enough for most people, but there are some great online programs available that go beyond basic expense tracking.
Manage Your Bills Effectively
Look at how your bills are arranged. Identify those that come out on the same day every month and schedule them for direct withdrawal from your account so that they’re never late. You might also want to look into prepaying some of those long-term costs like insurance premiums, loans, and mortgages. This is called “paying yourself first” and can help you balance your budget more effectively.
You should look out for online apps and software to help you manage your bills. You could even consider using a BNPL service (buy now pay later) for your bills. This can be useful if you’re tight on cash that month. Some companies even let you budget bill payments as part of their service.
Consider Your Essentials
Every budget needs essentials and every essential costs money in some form or another. These items might include food, utilities, rent/mortgage, clothing, and cleaning products. Some of the biggest single expenses for most households come from their vehicle and home loans so lookout for ways to minimize these costs such as buying a fuel-efficient car or finding a low-interest home loan.
Set Aside Money Each Month
Finally, you should also budget for the things that make life more enjoyable. Whether it’s a couple of beers at the end of a long week or a special meal to celebrate every now and then, you need to be able to enjoy yourself and there’s no better way to do so than having some extra cash in your pocket.
Some people also find it helpful to set a certain amount aside for a rainy-day fund. This can help keep you from going into debt if an emergency comes up and means you won’t have to scramble around with a payday loan service. You don’t want to spend all of your money on frivolities, but if you’re careful with how much goes toward essentials, you should have some to enjoy yourself too.