Creating a budget
The first step in creating your budget is to know what funds you have to work with monthly. That’s easy. Gather your monthly pay stubs or records of whatever kind of income you regularly have. For freelancers, this part may be a little harder, but try estimating a realistic monthly average income.
Next, you need to know what’s going out. That means gathering all of your monthly bills and a month’s worth of receipts. Once you’ve got your standard expenses (rent, phone, cable, utilities, etc.) on paper and charted a month’s worth of variable expenses, such as food, medical care, and sundries, you’ll have a very good idea of how much you need to set aside monthly to avoid going into debt. If you regularly resort to using credit cards or dipping into savings because there aren’t sufficient funds in your checking account, you want to be aware of this fact so you can strategize ways to improve your cash flow.
Getting it all down on paper or in a spreadsheet is a great way to start, but for additional help, consider purchasing a computer financial organization program like Quickbooks or Quicken.
Where can you trim?
You may already consider yourself budget-minded. Perhaps you’re a fan of dollar stores and a devoted coupon clipper. If so, bravo! There may still be a few items you haven’t considered trimming from your monthly expenses, though. There are many resources available to help you think about how to save money. You’ll find blogs, Web sites, newsletters, magazines and television shows loaded with great advice on affordable apartment living. Be creative in brainstorming ways to take care of your needs without breaking the bank.
A few quick cost-cutters include negotiating with your utility carriers (phone, cable, gas and electricity) on their lowest possible rates and flat-rate plans. You might join a membership club such as Costco or Sam’s Club to buy common household items in bulk, or create a dining club with friends and neighbors where you make large batches of favorite meals for each other’s freezers. Cutting down on meals, coffees and snacks in restaurants can also make a big difference to your bottom line. Brown-bagging it saves you calories in addition to plenty of money, and you may find eating fewer unhealthy cafe calories also trims your waistline.
Sticking with it
Living on a budget can be a challenge, but you can also make it a game. Check out the multitude of smart phone apps available to help you keep track of your expenses. Let grocery lists (or their digital equivalent) be your new best friend. Sticking to your list — which you’ve cross-referenced to your budget ahead of time to make sure you can really afford everything on it — helps eliminate impulse buys. Be aware of what you buy, and be intentional in only buying what you really need and will use.
Budget living has become a fact of life for modern citizens, regardless of income level or geographic locale. Knowing what your means are, living within them, and constantly striving to trim the fat will keep you in the green, away from debt, and more in control of your financial destiny.
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