Last Updated on Dec 5, 2020 by James W
Everyone could use a little extra breathing room in their finances, especially during covid. This breathing room does not necessarily need to come via working multiple jobs too. Those who budget well will often find themselves with a little more wiggle room to work with throughout the month compared to those who have no set plan. To learn 3 tips for budgeting well, continue reading. You’ll find out that creating a budget for yourself is not as hard as you might think.
Set Savings Goals
For both the long term and the short term, setting savings goals will help you to save money. Think about the things in life that you want to save for. In the short term (1 to 3 years), consider saving money for a marriage or a down payment for a car. These short term goals should be fun, and feel rewarding once you accomplish them. You should especially save money for an emergency fund, just in case anything were to happen where you would be without income for a while. During your saving process for the short term, you should be saving for the long run as well. When planning for the long term (4 years +), consider saving for a down payment on those Calgary homes for sale you’ve been looking at, your children’s education, and even retirement. These goals align more with life goals rather than short-term fun things.
Record Expenses
One of the most important parts of budgeting well, recording your expenses will help you to figure out how much money you truly spend per month. This means EVERY expense…every trip to your local fast food joint, every trip to the mall, etc. Once you have collected enough data about your spending, you can categorize it depending on where you spent your money. If you find that you are spending more money on gas every month than you had originally thought, consider setting a limit on your monthly expenses in that category (and use public transportation if you can). Keep receipts, and make sure your expenses you recorded align with your credit card or bank statement too.
Budget to Save
Once you have your goals set and your expenses recorded, you should begin to organize your expenses into a budget. This budget should detail how your savings match up compared to your expenses. This allows you to plan for your spending, limit overspending, and stay in the green for the month.
Budgeting well is easier than one might expect. If you plan your budget well and are dedicated to it, you’ll find yourself with additional income for a long time. This extra money can secure both your short term and long term financial future, and leave you smiling in the green.
