How to make a budget for 2018 and stick to it
If you’re gearing up for a decent savings idea, then you must know that each incredible financial plan begins with a sound spending strategy. In case you’re attempting to pay off bills or put something aside for a fantasy get-away, a financial plan is your initial move towards making your financial objectives a reality. Follow these simple tips for setting up reasonable spending habits that get you where you need to be.
CALCULATE YOUR EXPENSES
Your first step is discovering precisely the amount you’re spending every month, you’d be surprised how much money may be flying out of your pocket without you knowing! Do this by consulting your bank statements, receipts and financial documents. You keep track of your follower count on Instagram and Twitter right? This is essentially the same thing, just a lot more math. Try getting apps like Wally or Mint to reduce the hassle of noting down your expenses and keeping a track of your overheads. This is honestly the simplest way.
AUTOMATE YOUR SAVINGS
Not sure how much you should be saving? 20 percent of your take-home pay is a good figure to start with when it comes to saving, investing or paying your debt. Once you have figured how much money you need to put away into your piggy bank each month, it’s time to conclude your income each month. It’s imperative that you save up!
CATEGORIZE YOUR WANTS AND NEEDS
Aim to put no more than 50 percent of that take-home pay toward essentials, and no more than 30 percent toward discretionary spending. Essential expenses should include four main categories: housing, transportation, groceries and utilities. If you find yourself stretching yourself too thin in this category, re-evaluate whether you really need to be living in a luxury apartment.
Next up is that 30 percent chunk spent on discretionary spending, so things that you want, but don’t need.
Spending categories under this portion of your budget can include expenses like entertainment, dining out and your cell phone plan. These expenses are kind of like the bad-for-you part of your budget that you can often trim. If you find yourself panicking in the days leading up to payday (will my card get declined again?!), this is the area of your budget you should consider cutting back on. You might want that latest and greatest smartphone, but do you need it? No. And your budget can help you determine how many of those “wants” you can afford.
BE REALISTIC ABOUT YOUR GOAL
Aim for sticking to your budget most of the time and you’re certain to stretch to financial goals. Going over budget occasionally is fine, providing you get back on track as quickly as possible. However, don’t ever go overboard with too much spending since that will only cause a setback. Make sure the goals you set for your budget aren’t completely unrealistic because failing to stick to a budget that was never an option can be detrimental to your mental health, discouraging you from sticking to more realistic future budgets.
MAKE EXTRA CASH:
Opt for some freelance work, selling your old or used things online and maybe making some extra money by tutoring. It’s just few of the things that can get you some cash to load off some stress off your shoulder.
HOW TO STICK TO YOUR BUDGET:
Only keep as much money as allowed
Whenever you pass nearby a store or café a little voice may start whispering into your ear, suggesting that you deserve to splurge a bit. Strengthen your willpower, push past that shop ignoring the new phone or fancy meal you may have had your eyes on. An easy way to stick to your budget is to only carry the money that you’ve put aside for luxury use, thus even when fate tempts you towards that fancy looking contraption in the window of your local tech shop, you won’t be able to get it.
Get rid of credit and debit cards
An idea that’s been floating for quite some time is to get rid of your credit card & debit card and only carry cash money. The reason for this is more psychological than it is physical as it has been theorized that due to the transfer of money being more satisfying and easy through a card people tend not to think twice before spending. If you were to only keep cash, seeing the deduction in the amount of money before your very eyes would caution you to spend less.
Stay away from temptation
How would you go about staying away from temptation? One way would be to switch to streaming services instead of using the television which is infamous for incessantly providing the viewer with ads and commercials to goad them into buying products. Streaming services are cheaper and are also commercial free. Another way would be to avoid taking routes that take you past shops and cafes which tempt you to deviate from your budget, it may be a bit annoying at first but the end result will be well worth the effort.
Creating a budget and sticking to it is always long, arduous work but in certain situations it is necessary. I hope these tips will help you to form a budget and we are sure you’ll soon be back on track to financial stability!