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Budgeting 101: Basic Strategies that will help you Budget Efficiently
Budgeting Tip: Compare and save on credit
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Budgeting has always been spoken of
as an ideal way to organize your spending, cut costs, and ultimately
save money. Despite having the basic knowledge of this simple tool, it
is a surprise that most consumers don't take budgeting seriously.
"Don't have enough time," "I do my budgeting in the head" are often
cited as common excuses for not budgeting. We don't claim to be
budgeting experts but for your help, we have outline a few common sense
steps that will help you budget efficiently.
Don't purchase on impulse. Think about the last time you spent money on something, that you regretted later. What made you regret? You realized you didn't need the merchandise and had a mistake purchasing it in the first place. Right? It probably was an impulse purchase. Wasn't it? Simple budgeting tip: Don't purchase on impulse! When you get tempted to buy a non-emergency item, tell yourself, "I will think about it later." If after some thinking, you really feel like you need it, go ahead. If not, just drop the idea.
Evaluate your spending pattern. Where do you spend most of your money? Do you know? Is it clothes? Food? Travel? Unless you know where the dollars are going, there is nothing you can do about them. So the first step would be to find out where you spend. Start maintaining a journal and every time you open your wallet, write down where the money went.
Categorize your
spending patterns. Analyze these notes on a daily, weekly, and
monthly basis. Do you see a trend? Now, group your purchases into
categories and evaluate how much of your money goes toward each
category. This is your "spending profile" in simple words. Makes sense?
See budgeting is not that hard after all.
Budgeting Tip: Compare and save on credit
cards, cell phone, long distance, Internet access, mortgages,
insurance, and more at www.dontspendmore.com
Have a goal in mind. Unless you know where you want to go, how are you going to reach there? Yes, you must have a clear budgeting goal in mind. An example would be: "I want to cut my expenses by 20%." Get the picture? Good!
What can be avoided? Now that you know your spending profile, try to think of expenses you can avoid. Use this profile and try to find creative means of economizing in each category. Be realistic, though. You don't have to cut down on necessary expenses. Cut down only on non-essential items.
Budgeting tip: have a control system. Human beings work very well when there is clear understanding of consequences. Once you have established a realistic goal, set-up a "rewards" and "punishments" system. If you achieve your budgeting goals, reward your self with a little treat. If not, take on a small punishment that you have decided for yourself. Be honest, this is all about you and for your own good.
Happy budgeting!
To read another article on budgeting, click here.
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