A journey of 1,000 miles begins with one step, and the journey to financial freedom is no different. It begins with the first step of planning how to use what you have to make the steps towards being financially secure. The following budgeting tips will help you to do just that:
1. Know how much you can spend
Do you spend money and then find that you are short of cash before your next payday? It may be because you didn’t work out how much you have and allocate funds to the different expenses. Doing so means that you will have enough to meet all your expenses and not run out of cash and swipe a credit card or opt for a costly payday loan.
2. Automate payments
There is always something that you want to spend on. Make it impossible to go over your budget by automating your payments at your bank. Place standing orders that will make the payments that you need to so that the money you can access is only what you can afford to spend. You will also avoid late payment fees.
3. Automate savings
Do the same with savings. Automatically withdraw from your checking account to a savings account with a standing order. Choose the highest-earning savings account you can find and choose a fixed account so that you are not tempted to withdraw from your savings account unless you really need to.
4. Grow your savings
It is not enough to use budgeting tips and put money aside. You need to invest it into investments that will bring you returns, or your savings will lose value because of inflation.
5. Plan variable expenses like meals, travel and entertainment
It is often variable expenses that cause the tendency to overindulge. Plan these expenses ahead. Apart from your regular savings account, put money aside for planned large expenses that would wipe out your savings. Put a little aside from every paycheck for that holiday, wedding or new flat screen.
6. Use coupons and discount vouchers
There are a number of websites like Groupon, LivingSocial, WagJag, TeamBuy and Buytopia that offer fabulous discounts on everything from travel tickets, spa visits, event tickets to stores. You’ll save a lot via these sites.
7. Compare prices online
While you are online signing up on these websites, go to price comparison websites too. These list companies in order of what they charge for the same product. Use it to compare utility service company rates, insurance premiums and prices of various commodities.
8. Adjust as income adjusts
If your income is variable or commission-based, adjust your spending accordingly. Cut your spending when you earn less and when income is high, put more into clearing debts, such as credit card debt, or save and invest more.
9. Use online budgeting tools
Rather than scribble on bits of paper that you will probably lose, do your budgeting online. There are fantastic online budgeting sites where you can keep track of your spending from one pay period to the next.
10. Be accountable
Finally, be accountable. While finances are personal, having a partner walk with you and keep you financially on track is very helpful. This is what Credit Counselling Services of Atlantic Canada (CCSAC) will do for you. If you are in debt, you’ll be shown how to get out it, stop those calls from creditors and avoid bankruptcy. If you are not in debt but are not where you wish to be yet, you will get guidance in the form of budgeting tips and educational talks and seminars to help you get there.