When it comes to budgeting and saving money, there are steps that can be taken for staying organized and keeping on track. As in accounting, we all have assets and liabilities which affect the way we can budget and save, and aside from business, some assets may actually be a hindrance in setting forth a budget. When this happens in business it can lead to layoffs, but when individuals set forth a budget with an end goal in mind, saving may result in sacrifices having to be made.
So let’s get into a list of 7 tips to budgeting and some sacrifices to consider for what may apply depending on your situation.
1. Calculating Monthly Income After Taxes– If you work and receive checks on a weekly basis, you must take into account what you will get after deductions such as money taken out for social security, a 401 k or health and life insurance. For entrepreneurs or those receiving a 1099 form when doing their taxes, subtract expenses that are necessary for maintaining your business or side hustle.
2. Calculating Monthly Expenses– Monthly expenses such as rent, travel expenses, credit card bills, cable, and phone must be taken into account when trying to save money. This is without mentioning expenses for food and hygiene that are essential for everyday living.
3. Cutting back on Expenses-There is no way to save on rent, but sacrificing by cutting back on cable and phone can be a way to reduce household expenses. House phones are not a necessity anymore being that most people have cell phones. With services and tools such as Hulu, Netflix, and FireSticks, you may find that it offers mostly everything you want to watch on television at a fraction of the price.
If you eat out a lot because you are pressed for time, consider cooking big meals on days off to last a few days. The days you don’t have a meal prepared, plan to make simple meals that take little preparation and time to cook such as burgers and tacos.
For having something in your system to get you through the workday, consider bringing a sandwich for lunch or making a healthy protein shake to take with you.
3. Try a Budget Planner- Try a budget planner and divide the money you have left after income and expenses into three (money for necessities, money for wants, money to save for a rainy day).
The only necessity is food and water and that has already been covered. Balance what you want with how much you save after subtracting necessities. We only have one life to live and that may include many wants but the ideal way to balance a budget plan on these three principles is with a 50/30/20 rule.
- 50 percent of your money should go towards necessities
- 30 percent should go towards wants
- 20 percent should go towards saving
4. Try a Goal Planner– Having a goal planner is great for staying focused and keeping on track with your endeavors. You might want to save for more than just the sake of it. If you have an idea to start a business, plan on getting married, or take a vacation then you may want to do so in a particular timeframe.
If you’re saving for retirement or your child’s education, consider investing money into an IRA account or a 529 plan. While investments come with risks and can lose money, they also establish an opportunity for growth when the market rises and may very well prove beneficial if you plan for an event far in advance.
For more information on planning and accomplishing goals, click here for this article on how to plan for the future.
5. Buy Necessities in Bulk– When shopping for groceries such as food, paper towels, and toiletries it would be wise to buy in bulk. You may pay $6 for a 4 pack roll of paper towels and $17 for a pack of 15. Buying in bulk is a great way to budget and have necessities to keep you going for a while.
Being a member of wholesale clubs like B.J’s or Costco is a great way to have access all year round to the items you need in bulk at a great price. If you are not a member, try going shopping with friends and family who are members. Utilizing family and friends can have a section in itself for how to budget. I mean what are they here for? … To answer that they are there to share account information on Hulu and Netflix and babysit if you have a child every now and then.
6. Shop for what you want on holidays– A list of holidays to go shopping for saving money includes the following below.
- Amazon Prime Day-Prime Day is an annual deal event exclusively for Prime members, delivering two days of special savings on tons of items. Prime Day 2020 dates for the United States have not been announced yet.
- Tax-free weekends-Varies from state to state in the U.S, but usually takes place in July or August.
- Labor Day-The first Monday in September
- Columbus Day-The second Monday in October
- Black Friday- The day after Thanksgiving
- Cyber Monday-The Monday after the Thanksgiving holiday in the United States
- Super Saturday- The last Saturday before Christmas.
- New Year’s Eve
Black Fridays produce a lot of sales for different categories of items you may be interested in buying. Instead of applying the 50/30/20 rule on a monthly basis, try 50/50 and put off on wants till the holidays.
7. Make saving automatic– Almost all banks offer automation services for transferring money in your checking and savings accounts. You can choose when, how much, and where to transfer your money. To be less tempted in spending on your wants till the holidays and saving for a rainy day, money deposited in your account can be split between your savings and checking.
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