Knowing how to properly manage your finances is one of the most important things you’ll ever learn in life. While knowing how to budget is critical, it can be a bit tricky to master. Here are four ways to help you make sure you don’t go completely broke by the end of the month.
Set Up a Budget
If you don’t use a budget, start one now. Budgets are not as complicated as they seem, and they’re critical to knowing where your money is going. To start, keep track of all of your expenses for an entire month. Then, divide those purchases up into categories, such as food, clothing, gas, home repairs, etc. Add up the amount that you spent in each category. These totals will give you a good starting place to help you estimate how much you’ll need to set aside next month. With last month’s numbers in hand, write out your spending goal for each category for the next month. When you spend something out of a category, write it down so you’ll know what money has already been spent. There are many different methods to help people budget – Excel, the envelope method, or a number of different budgeting apps. Find one that works for you and stick with it.
Update Your Budget Regularly
Once you have your budget in place, update your numbers regularly. People who know how much money they have in the bank are less likely to overspend. When you actually see that there’s no money left, you’ll be less likely to go buy something. Try to keep further limiting your budget every six months. Just as was mentioned in the section above, make spending goals for the next six months based off of the previous six months. You may want to even slowly lowering your budget in certain areas. For example, you may want to go from spending $500 on fast food to only $450. Then, you can keep going lower in future budget assessments. Other areas that you might want to think about lowering your budget in are gas and utilities. When you decide what amount of money you want to limit yourself for a certain time period, you should then create goals that will help you meet that higher financial goal.
Anticipate Future Expenses
It can be tempting to spend any leftover money on luxuries, like a vacation or a new pair of shoes. However, before you spend leftover money, look to the future and see if you will have any future claims on your cash. Things like annual property taxes, car registration, HOA fees, or even new summer clothes for the kids, can sneak up on you and drain you of cash if you don’t plan ahead for them.
Get a Cash Advance
When your best attempts to budget fail, don’t give up. Identify what went wrong, and why you went over budget. If you need a little cash to get you to your next paycheck, consider getting a cash advance, like those from American Cash Advance and Title Loan, to help. Most importantly, try to fix whatever went wrong so you can make sure it doesn’t happen again.
It’s important to know where your money is going. Knowing what you’re spending your money on can help you eliminate waste and maximize your purchasing potential. Follow these tips to make your next paycheck stretch as far as possible.