>U Mom Knows Best: How a Budget Can Help You Save Money

Wednesday, July 13, 2022

How a Budget Can Help You Save Money

 If you want to win with money, you’ve got to change your actions with money. The way you do that is by making a budget and sticking to it. And the way you do that is by tracking your expenses.

 Prices are going up and your income is not. So how can you survive during these tough money times? While most people think the answer to having more money in your pocket is by making more money, there is an easier way. To be able to survive the higher prices of gas, groceries, and other expenses, the answer is to create a budget. 

 Creating a budget may be simple but sticking to it can be hard. Making a budget might seem overwhelming at first, but this step-by-step budget guide can help you take the first step. Making a budget is like learning to ride a bike. It may seem tough but with practice, budgeting will become easier.

What Is a Budget?

 A budget is a plan for your money. A budget can help you spend your money wisely, so you can learn to live off the money that you earn. As I tell my kids, it is not about how much money you make but rather about how you spend your money. If you have X amount of money coming in, then only X amount of money can be spent. This is a tough thing for most people, even rich people. Spending money can be fun but living with debt is not fun. Starting a budget will help you get your spending in control.

Four steps to making a budget

Budget Step 1: List Your Income

Budget Step 2: List Your Expenses

Budget Step 3: Subtract Expenses from Income

Budget Step 4: Track Your Transactions

 To start your budget planning, you need to decide how you are going to make your budget plan. Decide if you’re making a budget on paper, with a spreadsheet, or in a budget app. Then grab your paycheck stubs, bank statements, credit card statements, and your spouse if married. Of course, the best way to see all this money info is to go to your online accounts.

Budget Step 1: List All Your Income

 Income is the money that you receive from your job and any side hustles. Write down all the money that comes in every month from both your job and your spouse's job. This is net income, income that you receive after taxes. For the best budget planning, do not list irregular income that is not the same every month. Then add all the income and this is the amount that you have to spend.

Budget Step 2: List Your Expenses

 Take a look at your bills and write down your monthly expenses that are necessities. These are things like the mortgage or apartment expenses, utilities, gas for the car, food, car insurance, cell phone, childcare, and internet. Look at bank statements and credit card statements. Then write down miscellaneous income like personal spending, fun money, and entertainment expenses. This is the time, to be honest, and do your best to calculate how much you spend on things like eating out and daily coffee trips.

Budget Step 3: Subtract Expenses from Income

 Subtract all your expenses from your income. This number should not be in the negative. If you are spending more money than you have, it is time to cut out some miscellaneous income. Maybe you can cut back on eating out or start making your coffee at home. If you are not able to cut back on any expenses or need some extra money while learning to budget, consider a short-term financial solution like a personal loan.

These financial aids can help you cover unexpected expenses while you work on managing your budget. Just make sure to borrow responsibly and have a plan in place to repay it promptly. Taking out a short-term personal loan to handle all your expenses is not a sustainable solution and should only be used in emergencies. For instance, if your car breaks down and you need it for work, a short-term personal loan can help you cover the cost of repairs until your next paycheck comes in.

 Even people who struggle with bad credit can get a small personal loan to help them through tough money times. Most people think that a personal loan will hurt their bad credit even more but the truth is it might help your credit score. If you make your payments on time a small personal loan can help your credit score. Think of a personal loan as a fresh start to better money management. Click here for more details.

Budget Step 4: Track Your Transactions

The hardest part of budgeting is tracking your money transactions. That means writing down everything that you spend your money on. This is where your phone or a money expense app comes in handy. That means tracking every penny. List your weekly coffee trips, how much you spent at the grocery store, that candy bar at the gas station, that dollar for a soda, etc. By seeing where your money goes, you can then decide what expenses you can spend less on. You might be surprised to see how much you spend on take-out and daily coffee.

Learn how to set financial goals

 Once you get the hang of a money budget and learn how to spend your money wisely, you can start paying off debt and start saving for big expenses. Budgeting is how you make any money goals happen. Budgeting is a learning experience that takes time but the rewards of keeping a budget with your money are many. Like the reward of buying a new car. Check out these Car Shopping Tips that I used to buy a new car. 


AiringMyLaundry said...

Yes! I try to always budget because I love when I can save money.

Simply Tasheena said...

Especially with this economy, budgeting is so important. Thanks for sharing these tips.

Richelle Milar said...

These are all really great and very helpful tips, thanks for sharing this with us!

Beautiful Touches said...

Budgeting is such an important part of keeping track of your personal finances and I wish it was discussed more frequently!

Fatima D Torres said...

Budgeting yourself comes in handy when you're raising a family or have goals for something in the near future.

Gervin Khan said...

Definitely a great article to read, budgeting makes money go to where it should be and help everyone to save more!

Christy G said...

Budgeting is super important. I do that so that I ensure that my bills are paid on time.

Reviews By Kathy said...

My husband recently retired so the hardest thing for me when budgeting is decided if it is a want or need. I realize prices are higher so less pleasure spending for sure!

Samantha said...

So important to set a budget! Love all of these tips!

mail4rosey said...

Debt is no fun. It always comes around to stifle you in one way or another.

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