According to a survey from the NFCC, 7 out of 10 Americans are worried about their personal finance, and about 60% don’t maintain a budget for themselves. If this startling statistic sounds like you, you may feel overwhelmed and hopeless when it comes to managing the inflow and outflow of your money. Although some truth lies in the difficulty of effectively budgeting and growing wealth, there are some easy habits you can start today that will set you on the path of financial stability.
Keeping track of your spending can make a big difference in your habits
1. Keep Track
One of the first steps to becoming more responsible with money is actually tracking where and how much of your paycheck is spent. This seems trivial, but keeping track of your spending can make a big difference in your habits. If you spend more money on streaming subscriptions than you do on groceries, you may need to adjust your budget. If coffee is taking up half of your expenditure, then purchasing an at-home coffee maker may be the best option for you. Simply seeing your money influx and efflux is extremely helpful for adjusting your budget in the future and eliminating wasteful spending habits.
2. Find Savings
Another great way to cut down on spending is to find savings anywhere you can. Couponing may seem like something your grandmother does, but consider this: coupons are promotional deals that give you discounts for simply bringing a piece of paper on your shopping trip. If a little bit of effort can save you some money, then why not make an effort? You can find coupons in magazines, newspapers, and posted around your town.
In addition, online shopping can also be discounted with online coupons. Watch out for promotional deals, holiday discounts, and coupon websites. By planning ahead and coordinating your purchases with promotional deals and sales, you can cut down substantially on your shopping costs.
Manage money effectively by applying coupons with online shopping
3. Check Your Bills
Bills seem like an unavoidable, uncompromising part of adult life. If you own your house, you take what you get, pay your bills, and ask no questions. However, a service provider of electricity, water, pest control, or insurance that offers much cheaper rates than your current provider may be a phone call away. Once you begin tracking your expenses, you can compare prices of your current bills with the rates of other service providers in your area.
If this sounds like too much work, you can also find websites that make the comparison for you. For example, if you live in Texas, head to https://texaselectricityplans.com/ to compare the cheapest electricity providers in your area. This resource also provides tools to actually make the switch once you find a cheaper provider.
Once you have found some of the problems with your current expenditure, it’s time to sit down and make a plan for the future. This is the budgeting portion of your financial makeover, and it’s a step that many people usually overlook. However, spending money that you don’t have a host of consequences; the median credit card debt of an average household is up to $2,300 today.
To budget, begin by figuring out your fixed costs. These are things like rent, utilities, loans, and savings. Once you subtract that from your earnings, you have your monthly expenditure for variable costs, like food, products, and entertainment. A great way to budget is the 50-30-20 rule. 50% of your money goes to your fixed costs, 30% goes to your variable or your wants, and 20% is the amount you want to save for the future.
Continually track your expenses to make sure that your budget is actually working
Now that you have a plan, continually track your expenses to make sure that your budget is actually working. Every month, sit down with your bank statements and check that you hit every goal you set at the beginning of last month. If you see any discrepancies, adjust your budget or spending thusly. By making a cycle, you are constantly improving your spending habits over the year.