3 Great Budgeting Tools To Help Get Control Of Your Finances
Budgeting is a deeply personal process and sometimes painful. However, this is the first step towards taking control of your finances. Choose the one of budgeting tools that suits you best and start using it.
Method # 1: Money diet
Studies have shown that a person is much more willing to part with money if he does not see it in person and does not hold it in his hands, that is, when paying for goods with a bank card. This is why if you want to take control of your finances, keep only cash with you.
There are some exceptions to the rule, for example, buying air tickets or paying for a hotel room. Even one month of such a “money diet” will help you understand when your money is wasting in vain.
Method# 2: Income and expenses
Start keeping track of your income and expenses: record how much money you received and how much you spent, right down to buying a chocolate bar or taking a bus ride. As we remember, take care of the pennies, the pounds will take care of themselves. Under the current realities, it can save you more than one several hundreds dollar a month.
Start saving money. Even if you are 25 years old, start investing money. Make it a rule to transfer funds to a separate account or put in an envelope, for example, 5% of your monthly income. Such shares may be useful at the most unexpected moment, for example, when you need expensive treatment or car repair.
Divide your funds into four parts according to the number of weeks in the month and try to stay within the established budget. It is best to withdraw cash from a bank card on Mondays, and then put it aside until next Monday. So you won’t be tempted to use your credit card again.
Method # 3: Interest budget
There is a financial budgeting help program called “50-30-20”. It is very easy to remember and works extremely effectively in everyday life. The meaning of this rule is that 50% of the monthly budget should be spent on fixed costs (payments for housing and communal services, food, transport and loans), 30% on flexible costs (buying clothes, going to the cinema, meeting friends) and 20% – for financial purposes (savings for retirement, savings for a car or travel).
Tags: budget, finance