Lets be real, sticking to a budget can be hard work! How can you make a budget and stick to it?
- Follow the 50/30/20 Rule
The 50/30/20 rule is a ratio designed to allot how much of your money should be going to different areas of your finances. The 50/30/20 rule is based on your income after taxes. 50 percent of your income should be going to your needs. Your needs are things such a housing, car insurance, gas, food, and other necessary bills you may have. If this category takes up more than half of your income, find ways to reduce this category. 30 percent of your income should be going to things you want such as eating at restaurants, subscriptions, shopping, etc. This 30 percent is designed for the things you want. 20 percent of your income should be going to savings and paying off debt. Saving part of your income will create a great safety net incase an emergency arises.
2. Write It Down
The easiest way to make a budget and stick to it is to write everything down. When you commit to writing down everything you spend money on, including small items, you can see exactly where your money is going. This will allow you to cut back in areas that you are spending too much money on. Get a book or journal specifically for tracking your spending. This doesn’t have to be a fancy book, just find a safe place to write down your spending record. You may prefer to write this down in your phone. Everyone is different, just remember to write down it down when you make a purchase!
3. Don’t Pay Market Price
This is huge! Never pay market price for something you want. Shop around on places like Amazon, Facebook Marketplace, and thrift stores. You can find the same item you want at these places for so much cheaper. If you’re looking for a car, phone, designer bag, video game console, or a TV, check other places first. These items can be found in so many other places for half the price. I’m a firm believer in this. It can save you hundreds of dollars over time.
4. Refinance Loans
Loans vary in interest rates and length. Refinancing a loan could save you money depending on your current interest rate and the length of your loan. Interest is the amount of money you’re paying just to borrow money. Why pay more for a loan than you have to? Something to consider is the length of your loan. Longer loans will be less expensive to pay monthly. However, these loans will be far more expensive overall. If you can afford to pay more money monthly, consider refinancing for a loan with a shorter loan period.
5. Pay Off Debt
Paying off debt will allow you to have more money per month. Imagine no longer having a car payment, a credit card payment, or a loan payment. How much money would that free up during the course of a month? Paying off debt is important for a stable financial future.
6. Don’t Impulse Buy
Impulse buying is very bad when you’re trying to stick to a budget. Follow the 30 Day Rule when you feel yourself attempting to make an impulse buy. For example, if you want to buy a new phone, wait 30 days and think about the decision. If you still want the phone after 30 days, then purchase the phone. I would like to add, while you’re debating buying an item, start saving up for it so that you won’t struggle after your purchase. Remember to look for this item at different stores and find the best deal you can. This will save you money!
7. Set Goals
While you’re following a new budget strategy, start setting goals. Pick debts you want to get paid off in a certain amount of time and try to achieve this goal. Or, set a savings goal. Find a reasonable amount of money to save and do your best to achieve this. Once you have achieved your goal, reward yourself for your dedication.
8. Be Realistic
While you’re on your budgeting journey, be realistic. Don’t set a savings goal that you can’t achieve based on your income. Don’t spend all of your money trying to pay off a debt all at once. Set a budget based on your personal circumstances. Create a time frame that will work for you. Remember, emergencies happen. Maybe your car broke down or you have an unexpected hospital visit. While these things can be frustrating, keep trying. These may be setbacks, but you can still reach your goals. Adjust your goals based on your personal circumstances.
I hope these tips have helped you. I will be featuring more financial advice on my next post. Subscribe with your email for updates on my new posts. Thank you for your support! I appreciate everyone who takes the time to read my content.