Off to college? Beginning your career?
Here’s some simple questions…Do you know where every dollar goes that you earn? Do you ever say, “What did I spend my money on?” or “Count me out, I can’t afford it.” Are you low on cash before your next pay check? Are you saving enough or anything at all?
A great solution to these questions is to create a budget! Budgeting your money can help you stretch your dollars further and make sure you have something left for weekend fun. Then you can say yes or no to activities without wondering if you’ll break the bank! And, with the holidays coming— it’s essential!
So how did I create a budget? It’s not that hard. With just a few steps you can be smart about spending your money. Try this...
Estimate your monthly income: How much do you actually take home a month after taxes? I know, I know, you don’t have to tell me—I could have sooo much money if it weren’t for those taxes! Don’t include potential income like winning the lottery, selling off things on eBay or money from grandma either.
What do you spend your money on during the month? Detail is important! There are tons of things you don’t even think about when it comes to spending, so here’s a few areas to consider:
- rent (watch out...your parents could spring this one on you!)
- utilities: phone, cable, internet, electric, water
- food: eating out, groceries, that one cup of coffee every day
- transportation: car payments, gas (visiting the boyfriend every weekend gets pricey!)
- insurance
- personal: laundry, clothing, toiletries, pampering
- gifts (for me) or donations
- entertainment: going out with friends, sporting events, recreation
- medical: doctor visits, prescriptions
- miscellaneous: pets, monthly dues for the gym, etc.
And if you’re not paying your credit card in full each month, make sure you’re keeping track of interest! (P.S. that’s a bad habit to start!) Make sure you keep receipts because all of those $3 Walmart purchases start to add up. You might want to consider keeping an excel sheet.
Compare the difference: Do you have more expenses than income? If so, cut back on those non-essential expenses. If you find that you’re not able to put away as much as you’d like or that your spending habits are a little extravagant, then it’s time to “trim costs.” Entertainment is the easiest place to start—cut down on buying new DVD’s or reel in the nightlife; take one less trip to the mall or make a meal at home instead of grabbing a CrunchWrap Supreme! These things are much easier and more realistic than cutting down on fixed costs such as living expenses.
Now make goals for next month and stick to it! There are all kinds of shortcuts you can take to alter spending habits once you find out that you CAN live without them. It may take a few months to get into the swing of things, but soon life will be less stressful and you will find yourself saving money for the things you really need—like paying off those student loans, buying a new car or getting ready for a house in the future!
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