Make a budget: Many people don’t budget because they don’t want to go through what they think is a tedious process of listing expenses, adding up the numbers, and making sure it all adds up. If you’re bad with money, you have no excuse to budget. If spending a few hours on a budget each month is enough to get you’re spending on track, why wouldn’t you? Instead of concentrating on the process of budgeting, focus on the value that budgeting will provide to your life.
Use the budget: Your budget is useless if you make it and then let it gather dust in a file on your shelf or in a filing cabinet. Refer to it often during the month to help guide your spending decisions. Update it as you pay bills and make other monthly expenses. At any point in the month, you should have an idea of how much money you can spend, given the expenses you still have to pay.
Track you’re spending: Small purchases here and there add up quickly, and before you know it, you’re over budget. Start tracking you’re spending to discover where you’re overspending without realizing it. Keep your receipts and record your purchases in an expense journal, categorizing them so you can identify areas where you’re having trouble controlling your spending.
Make sure you’re paying the best prices: You can get the most out of your money by comparing prices, making sure you’re paying the lowest prices for products and services. Look for discounts, coupons, and cheaper alternatives whenever you can.
Limit your credit card purchases: Credit cards are the worst enemy of deadbeats. When you run out of money, you simply turn to your credit cards without asking yourself if you can afford to pay the balance. Resist the urge to use your credit cards for purchases you can’t afford, especially for items you don’t really need.
Save for big purchases: The ability to delay gratification will greatly help you manage your money better. When you put off large purchases, rather than sacrificing more important essentials or putting them on a credit card, you give yourself time to evaluate whether the purchase is necessary and even more time to compare prices. By saving instead of using credit, you avoid paying interest on the purchase. And if you save instead of missing bills or obligations, you won’t have to deal with the many consequences of missing those bills.
Contribute regularly to savings: Putting money into a savings account each month can help you develop healthy financial habits. You can even have the money automatically transferred from your checking account to your savings account. That way, you don’t have to remember to make the transfer.
Set a limit on your off-budget spending: A key part of your budget is your net income, or the amount of money left over after you subtract your expenses from your income. If you have money left over, you can use it for amusement and entertainment, but only up to a limit. You can’t splurge on this money, especially if it’s not a large amount and it’s going to last the whole month. Before you make any large purchases, make sure they don’t interfere with what you have planned.
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