If you are currently not one that budgets, you are not alone, in fact experts have said that two-thirds of the population actually do not have a budget or have tried and failed in the past. If you are one that does not check your bank account, or have no idea how much you are spending in key areas such as monthly bills, food, gas, or spending money, then it might be time to take a closer look to see if you can allocate funds out to stay within a certain budget. Sure, it will take a few months to probably get what you allocate out correct, as you don’t want to set too much or too little, but if it means saving money each month, it’s worth a try!
Know What is Coming in and Going Out
I’m sure you know what your salary is and how much you are bringing in each paycheck, but do you really know how much you are spending in eating out? Utility bills? It’s probably a good idea to first take a look at your credit or debit card statements from last month and actually go line by line to see what you’re spending and figure out if they are necessary or could be deemed unnecessary and an impulse purchase. If you can see what is going out, you can then take action to cut back.
Simplify Means of Spending
When you go from using cash, to debit, to credit, it can be tough not only to make sure you still have enough in your bank account, but that you don’t go overboard when it comes to spending. If you can simplify what you are using to pay bills and make purchases on it can help hone in what you are spending each month. Take cash for instance, if you only give yourself what you are allowed to spend until the next pay check, sometimes seeing that cash leaving your hand and going into the cash register can give you second thoughts to making the purchase.
Get (Stay) Out of Debt
Once you start to get to the point where you are charging up your credit card and you cannot pay the full statement balance you will begin to pay interest and hardly chip away at the balance and most of your payment will go towards that APR. Unless you are prone to some class action rebates, then it’s time to really make a dent into your credit card balance and get out of debt so you can put your money to good use in 2018 and really help out your financial future instead of paying off debt.
Build a Cushion
You never know what life is going to throw at you, whether that is an unexpected auto repair, needing to fix the furnace, wanting to redo the kitchen, or worst of all, a job-loss that you need money to float yourself for a few months without racking up the credit cards. If you can set aside a few months’ worth of expenses into a savings account to have on hand in case of emergency, you can give yourself a nice cushion without having to worry if a large bill or two does come out of nowhere.
When you have money available in your checking account, no matter what you have planned on doing with it, let’s face it, you’re going to want to spend it. If you can automate what you are not only contribute to your emergency savings account or retirement account, the more likely you can get used to missing that money every paycheck and really take care of your future. When it comes to saving for retirement, take a look at what your company offers as far as matching 401k contributions, as that could be leaving free money on the table if you don’t contribute the maximum of what they are willing to match.
Stay on Top of It
Keeping purchases to a minimum, really reducing expenses, while building an emergency fund and saving for retirement is not going to be easy, it will take lots of work, after all, those that are well off it didn’t happen overnight, so if you have a few bad money habits to break, that’s ok, that can be your New Years resolution to make, so let’s get prepared over this next week so that we can start off strong in 2018 and really get ahead this year building up your net worth!