Spending money can be too easy. Online shopping from cell phones and personal computers, give you the opportunity to make purchases from the comfort of your own home. An array of appealing merchandise awaits you three clicks away and the result can be an empty bank account, a high credit card bill, or too many days until payday.
Creating a budget plan can help you keep your finances and spending on track while assisting you with saving for the future. A monthly budget doesn’t need to be complicated Use these budget planning tips to get started today!
How to Budget Your Money – Three Different Ways
Different solutions work for different people. Choose the method that fits best with your thinking, as well as the one you are most likely to use. Remember, this tool should encourage you to use it, not put you off, so don’t be afraid to change your method if it doesn’t work for you!
The Bare-Bones Method
For those who are self-employed, the bare-bones method may work well. This method starts with your lowest possible monthly income to create a plan for your living necessities while other bills are paid as money becomes available.
Prioritize your monthly expenses by what is most important. Expenses such as mortgage payments, utility bills, and food fall into this category.
The Fixed and Variable Expenses Method
With this method, you will need to divide your expenses into two categories: expenses that remain the same month-to-month, and expenses that may fluctuate. You cannot lower fixed expenses, but you may be able to lower payments for variable expenses. By evaluating your spending this way, you can potentially to lower your costs.
Fixed bills may include car insurance, mortgage or rent, and other predictable expenses. Variable expenses might include eating out, recreation, and other discretionary spending you can possibly eliminate.
The 50/30/20 Method
Using this system, you break down your expenditures into three categories, which will take up 50%, 30%, and 20% of your net income. Your essential spending, such as utility bills, housing bills, and food allowance fall into the 50 category. The 30 category includes your discretionary and unnecessary expenses. You will use the 20 category for future goals, repayment of debts, and retirement savings.
Should your current expenditures not fit into these categories, you may have some additional work to do. This, however, is the strength of creating a plan to budget your money. It provides a tool for allocating and controlling the funds you earn each month.
Tracking Your Budget
You should track your spending to make the most of your budget. You can use a paper system if you prefer to write out information for the most personal tracking. Spreadsheets also offer both utility and customization. Apps for tablets, phones, and web browsers also offer interfaces written specifically for budgeting.
Structured Settlement Payments for Your Short-Term Needs
Although these budget planning tips can help you going forward, you may need more immediate funds to reconcile your expenses. Selling structured settlement payments, can provide the money you require for a short-term needs. Contact Novation Settlement Solutions for more information and solutions to address your specific needs.
*Novation is not a financial advisor or consultant and strongly recommends that you speak to a lawyer or accountant before making any significant financial decisions.