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If you often find yourself having more days left in the month than you have money left in your account, you most likely have guilted yourself about your spending habits and the need to take better responsibility for your money.
Whether you are embarking on your journey of financial accountability to prevent you from always running out of money, saving, or just wanting to know where all your money is going,starting a budget could be the first step to solving your problems.
Below are some really easy steps for you if you are just starting and want an easy way to budget your money.
This might not be the conventional way of budgeting, but it works for me, and it gets the job done,so I want to share with you this easy way to budget and save money.
1. What kind of budget?
The first step to an easy way to budget and save money is to know what kind of budget you are trying to create.
I know that there are different terminologies for the different kinds of budgets, but we are not trying to get too technical here.
What I mean ishow detailed you want your budget to be and what you want it to cover. E.g., Income budget, travel budget, etc.
After deciding what kind of budget you are trying to create,you can start by grouping similar expenses together under a general titlesuch as bills, miscellaneous, mortgage, groceries, taxes, etc.
When starting out, I highly recommend youmake it as simple as you canso it is less daunting.
You can make it more detailed as you get the hang of it.
2. Sum up your fixed expenses.
Assuming that you already know your exact income and have written it down, the next step is, to sum up all your fixed expenses.
These are expenses you have to pay fixed or specific amounts for every month.
This should include your rent/ mortgage, insurance, car payments, taxes, etc.
Subtract this total from your income.
What you have left gives you an estimate of the money you have left for the rest of your expenses.
3. Evaluate how much you spend on food and non-fixed expenses.
For expenses such as electricity, gas, etc., that change based on usage, you should place them under non-fixed costs.
You can look over these expenses and figure out where you may be overspending.
For instance, for food, do you eat out a lot? Are the restaurants pricey? Do you overspend on groceries?
Personally, I struggled with overspending on groceries at one point, which defeated the intent of making my own meals to save money.
I just went to the store and got as many groceries as possible because I thought it would last me longer.
Butfoodstuffs have a limited shelf life, especially vegetables.
So, I found myself eating more to keep from wasting food.
Still, some inevitably went bad.
If you can relate to this situation, you can tackle it as I did, which is toplan your meals for shorter periods, such as a week or two, and buy groceries for just that period of time.
And if you spend too much on electricity, a few habit changes should help lower the expenses significantly.
4. Make an estimate of non-fixed expenses.
In the step above, I mentioned evaluating your expenses. After that, you should know if you are spending too much and need to cut back a bit.
In this step, on the other hand, you shouldestimate how much your ideal expenses on bills, food, etc., should be and make a plan to stick to it as close as possible.
A few changes in your habit, such as preparing home-cooked meals, should make it easier to achieve your goals.
5. Evaluate miscellaneous expenses.
You will not realize how much you spend on random items and shopping until you start documenting it.
An excellent way to keep this expense in check is toset aside a limited amount for miscellaneous expenses every month and try your hardest not to exceed it.
If you struggle with self-control when you go shopping with your debit or credit card, you can go to the store with just enough cash to cover what you came to buy instead of your card.
6. Set aside money for emergencies.
The sixth step of an easy way to budget and save money is to set aside money for emergencies.
It doesn’t have to be a lot of money upfront.
Just make the commitment to set aside a small amount every month for your emergency fund.
Doing this allows the money to add up over months when you don’t use it and will surely come in handy when you need it.
7. Estimate your savings.
You can still save even if you don’t make a ton.
You don’t have to wait until you’re earning a lot of money to save.
The benefit of saving is not just in the money you’re setting aside that accumulates after some time; it is also in the habit you form doing it.
Saving requiresdiscipline and diligence.
These habits, when mastered, are beneficial in every other aspect of life and would make it easier to achieve our goals in other areas.
A popular piece of advice about savings is todeduct your savings first before any other expense so you can condition yourself to believe it is not negotiable.
And also, because you are more likely to spend all you have left after deducting your bills, saving some money becomes a little more difficult.
So, go over your income and expenses and see how much you can let go of each month to save, even if it is not much.
Ready to become savvy with budgeting?
There you have it, an easy way to budget and save money even as a beginner.
Admitting that youneed to take better responsibility for your expensesis the first step to taking control of your finances.
You can simplify or put a twist to your budgeting however you want.
Do whatever works for you and is easier for you to stick to.
Taking accountability for your money can change your life and your financial situation, and I am excited for you to embark on this journey.
