The Benefits Of Monthly Budgeting
Budgeting can be a daunting task. It’s not taught in school and it never crosses your mind until life forces it to become a priority. Yet it is an obligation that everyone should undertake in order to simplify their spending habits and, above all else, save themselves some money. A few minutes on the kitchen table at the end of every month will go a long way in helping reduce your debt, save you money for future purchases and help you create a retirement fund.
Why You Should Budget Monthly
Why should you start budgeting monthly? It’s simple, fast and doesn’t require a middle man that would add another expense to your life. Sure, there are plenty of people that are willing to handle your money for you for a percentage fee, but unless you’re sitting on some serious wealth you can definitely handle it yourself. Keeping with a set schedule allows you to build a habit of managing your own money, keeping track of what you spend and finding ways to maximize your savings.
How Budgeting Benefits You
The benefits of budgeting are immediately felt and last a lifetime. Aside from the instant ability to organize your finances, budgeting helps to ease the stress of daily life. People who neglect to budget often find themselves wondering where their money goes. Many times money comes in and gets spent on multiple things without being properly acknowledged by the spender. So those Uber rides you took because you were late those few times, that unscheduled stop at McDonalds or an emergency trip to the hospital, all add up to make your money disappear without you actually knowing. Budgeting lets you know what you have at all times.
So you’re thinking to yourself that budgeting sounds beneficial, even crucial to your financial well-being. All you need to do now is to get started. Easy enough, right? Actually budgeting is easier than you think. With the amount of applications and programs available to help with budgeting it can seem overwhelming to get started. Instead, try budgeting the old fashioned way and use a pencil and paper to write out your income and your bills and spending habits. It’s easier to forget the information you log into a device or computer if you’re just beginning. Writing your information down not only makes it easier to remember as a regular task, it also protects your information from nosy people. The last thing you want to do is have your financial information stolen when you’re trying to stabilize your finances.
Salary, Savings, Bills and Frills
Regardless of how you decide to record your information the format should look similar. Take your yearly salary and calculate how much money you earn per month. That should give you an accurate depiction of what you have available to you on a regular basis. The next important thing to record is your savings for each month. Whatever it is you’re saving for, be it retirement or that life-size model of the red Power Ranger, should always be the first bit of money spent each month. Regulating money to your savings helps keep you on track for the things you want and need in life.
Next up are the monthly bills that always come at the same time. Your rent, your utilities, your Netflix account, the student loans you need to pay back, and so on. Each of these expenses must be cataloged and are normally the same each month with the exception of a few bills (cell phone usage fees for instance). Having an accurate picture of what you spend each month makes it easier to cut out unnecessary services and trim the fat where you can. If you find payments flying out of your bank account each month and you don’t know where they are coming from (or going) then you can easily contact your bank to find out where your payments end up. Oftentimes you can even get a phone number to contact the company and cancel the service on the spot. Beware of cancellation fees!
Once you have your earnings, savings and spending recorded you have a rough rundown of your mature lifestyle. Everything you need to do each month should be laid out in front of you. The only things left would be the optional purchases. These vary in degree of importance from buying food to going to the movies. Making sure you stay in a comfortable spending zone will allow you to keep a certain amount of money on your person at all times for shopping or unplanned emergencies.
Budgeting Gives You Control
Recording a monthly budget requires dedication and attention to detail, but once you start you’ll see the benefits of being smart with your money. You’ll feel much more confident about your spending habits and you’ll never need to worry about where your money goes. Don’t forget the process: salary, savings, bills and frills. Stick to the general template and you’ll be taking your money into your own hands in no time.