More than one in five Americans don’t save any of their annual income, and around 69% only save 10% of their annual income. Are you part of the majority that doesn’t have a plan for financial security?
If so, this is likely because you struggle to stick to a budget, which leads to constantly dipping into your savings or credit card debt.
Budgeting is key for reaching personal finance goals, saving for the future, and growing your wealth with investments. Check out these budgeting tips to help you sort out your personal finances.
Set a Realistic Budget
If you’re struggling to stick to a budget, it could be because you’re setting yourself up for failure with a completely unrealistic budget. The amount of money you want to spend each month versus the money you need to or simply do spend, is likely quite different.
It’s important to push yourself to be financially smart, but putting crazy restrictions on your spending will only lead to you overspending your budget each month.
Assess your current spending habits and create a budget based on this. Notice areas that you can cut back, but don’t cut these out completely. For example, if you’re spending $200 on eating out each month, budget $100 to $150 rather than budgeting $0.
Pay Yourself (and Your Bills) First
This is the best financial and budgeting advice for beginners. The first thing you should do when you receive your salary is put money away into savings and pay your bills.
The best way to do this is to set up automatic bank drafts and direct debits straight into savings accounts and bill vendors.
This way, you will never be tempted to use your savings “just this once” on a concert ticket or new pair of shoes.
If you’re self-employed or a freelancer, it’s vital that you put money away for tax each month. This should be the very first thing you do when receiving your salary in order to avoid costly tax issues. Check out more info about tax problems here.
Organize by the Week
It’s easier to create and keep to your budget when you think weekly. This is a great way to spread out your spending and control your spending, too.
Assign yourself these weekly nuggets of money. For example, if you budget $200 a month for eating out, think about this as $50 a week. This will help you stick to the budget until the end of the month instead of splurging it all in one or two weeks.
Get Rid of Your Credit Card
This is one of those beginner budgeting tips that most people ignore but really shouldn’t. A credit card feels like free money, and it’s a surefire way to go over your budget every month.
Credit cards encourage unnecessary spending and bog you down with paying off interest fees. If you want to stick to your budget, cut up that sucker.
Budgeting Tips to Set You Up for Success
Start implementing these budgeting tips right away and watch your savings grow and your financial stress melt away! There’s no time like the present to set up a personal budget.
Are you looking for more personal finance tips and tricks? Our site is packed with informative content, so keep exploring for more!