While you might be tempted to simply say, "carpe diem," and spend your money as you earn it, this attitude won't be particularly helpful if you encounter some unexpected expenses such as major car repairs or medical expenses. Creating a workable budget can actually make your life more enjoyable rather than simply restricting your spending. Here are a few budgeting tips that will help you meet your current expenses and put a little money away for the future.
Before you figure out how to spend your money, you need to get organized. List all of your current monthly expenses. This should include rent or mortgage payments, car payments, credit card payments, insurance costs, utilities, food expenses, gasoline or commuting expenses and anything else on which you spend money. Be sure to look at your bank statements and credit card statements to help you remember any expenses that are easy to forget, such as subscription costs, gym memberships or other automatic payments.
Once you truly have a clear picture of how much you spend, you can determine how much money is left over. If it's not enough to budget some for future savings, then you'll need to find ways to cut back. One of the biggest mistakes people make is not paying off their credit cards each month. Credit card companies charge huge rates of interest, and this is money that you are just throwing away. So pay off the balances as quickly as possible and quit using most of your credit cards. You can usually get by with just one card, so just keep the card that provides you with the best reward offerings and pay off the balance each month. If you have trouble with this, just leave the card at home and bring cash instead. If all you have is cash, you simply cannot pay more than you can afford.
Being frugal is often much healthier. For example, consider how much money you spend on fast food or unhealthy restaurant food. Cook your meals at home, pack a lunch and bring your own coffee to work, and you not only will you save a bunch, you probably will eat much healthier food. When you do go grocery shopping, write out a list and stick to the list to keep costs manageable. Entertainment expenses often can be lowered as well, such as eliminating cable and watching TV online with a cheaper movie and TV streaming service. Your cell phone plan also might be able to be adjusted to a less expensive plan. Even turning off your lights and lowering your water usage can be an easy way to save some extra money.
After you assess your budget and trim off some fat, it is time to think about saving a portion each month. This can be money saved to cover unexpected expenses, but also you need to be saving toward retirement. If your company offers a retirement plan, such as a 401 (k), then arrange to have a portion of your money each paycheck deducted and placed into this account. Generally, it is wise to save at least 10% of your earnings toward the future and certainly more if you can spare the money.
Another option, or an option that can be combined with our retirement account savings, is to consider investing in different types of mutual funds. These funds allow you to take advantage of potential earnings in the stock market at much lower risk than you would incur were you to buy stock in just one or two companies. A mutual fund includes investments in many different holdings or companies to help minimize the overall risk. There are many types of mutual funds, from those that invest in a particular type of industry, such as a technology fund or an energy fund. Other funds invest in particular area of the world, such as a China fund or perhaps a South America fund.
Before you figure out how to spend your money, you need to get organized. List all of your current monthly expenses. This should include rent or mortgage payments, car payments, credit card payments, insurance costs, utilities, food expenses, gasoline or commuting expenses and anything else on which you spend money. Be sure to look at your bank statements and credit card statements to help you remember any expenses that are easy to forget, such as subscription costs, gym memberships or other automatic payments.
Once you truly have a clear picture of how much you spend, you can determine how much money is left over. If it's not enough to budget some for future savings, then you'll need to find ways to cut back. One of the biggest mistakes people make is not paying off their credit cards each month. Credit card companies charge huge rates of interest, and this is money that you are just throwing away. So pay off the balances as quickly as possible and quit using most of your credit cards. You can usually get by with just one card, so just keep the card that provides you with the best reward offerings and pay off the balance each month. If you have trouble with this, just leave the card at home and bring cash instead. If all you have is cash, you simply cannot pay more than you can afford.
Being frugal is often much healthier. For example, consider how much money you spend on fast food or unhealthy restaurant food. Cook your meals at home, pack a lunch and bring your own coffee to work, and you not only will you save a bunch, you probably will eat much healthier food. When you do go grocery shopping, write out a list and stick to the list to keep costs manageable. Entertainment expenses often can be lowered as well, such as eliminating cable and watching TV online with a cheaper movie and TV streaming service. Your cell phone plan also might be able to be adjusted to a less expensive plan. Even turning off your lights and lowering your water usage can be an easy way to save some extra money.
After you assess your budget and trim off some fat, it is time to think about saving a portion each month. This can be money saved to cover unexpected expenses, but also you need to be saving toward retirement. If your company offers a retirement plan, such as a 401 (k), then arrange to have a portion of your money each paycheck deducted and placed into this account. Generally, it is wise to save at least 10% of your earnings toward the future and certainly more if you can spare the money.
Another option, or an option that can be combined with our retirement account savings, is to consider investing in different types of mutual funds. These funds allow you to take advantage of potential earnings in the stock market at much lower risk than you would incur were you to buy stock in just one or two companies. A mutual fund includes investments in many different holdings or companies to help minimize the overall risk. There are many types of mutual funds, from those that invest in a particular type of industry, such as a technology fund or an energy fund. Other funds invest in particular area of the world, such as a China fund or perhaps a South America fund.
About the Author:
Cleveland Jernigan enjoys writing about investments. For further details about a Renminbi bond fund or to know more about global energy funds, check out these fund sites today.
No comments:
Post a Comment