Everyone wants to get a handle on their finances and start saving. But when planning, you have to deal with a lot of paperwork, receipts and spreadsheets. Is there a way to make things much easier? Yes, thanks to some simple tricks for managing your personal budget – with them, you can stop living from paycheck to paycheck.
Planning, accounting and control
The first thing you need to do is to determine the amount of your income. After that, you need to calculate the amount of your necessities – this could be your rent, utilities, car expenses, food, and more. Then put together a small spreadsheet with the total income, the things you need, and the amount of expenses.
Next comes the time to plan what to do with the money that remains. It can be spent on entertainment or saved.
Necessary and emotional expenses
It is important to always divide expenses into emotional and necessary, then it will be much easier to plan your budget. Sometimes it is very difficult to do this, because everyone is tempted by impulsive purchases that happen here and now. For example, goods at promotional prices, an unplanned trip to the movies or a café with a friend.
After all, it often happens that after we have the money, we feel that we can afford everything. And in the end, we don’t have enough to pay for utilities.
The 50/30/20 system
A popular and easy system of keeping a personal budget. The essence of this system is that 50% of your income should go to necessary expenses, 30% to emotional (entertainment, shopping, etc.), 20% into savings or debt repayment, if there is any.
This system gives you good control over yourself and your spending. If you stick to it honestly, you can save up for a vacation or some minor purchase, such as a new smartphone, in six months.
Financial safety cushion
Everyone should have a safety cushion, because no one is immune to perils in the future. It’s best if this amount reaches three to six of your monthly necessary expenses.
Life hack: if you have accumulated your cushion, it can be deposited in the bank, so that in a year it can bring you more money. If the size of your cushion is more than six months of expenses, you can divide it into two parts and keep one on deposit and the other in currency.
When you plan your budget, it becomes much easier to do it if you understand why you are doing it. You have to set yourself a goal, or maybe two or three. What you want to buy or do with the money you save and how much you need. Then it becomes easier to divide the necessary expenses and savings.
As trivial and simple as this tip may seem, people forget about it all the time. The supermarket is just a black hole for your money, because people there are constantly tempted to make impulsive purchases.
When you go to the store to buy bread, for some reason you walk out with a full bag of everything but bread (or with several kinds of it). Do you actually need all of these items?
Make a list of what you want to buy, based on the food in your fridge and the meals you’re going to cook. Cook at home, in a calm atmosphere. Plan everything well, and in the supermarket go only for the needed products – don’t pay attention to promotional offers if they are off your list. A few trips to the store with such a list and you’ll realize how much money it saves.
How to plan
You should plan the way you feel comfortable. You can make a special notebook where you can write everything down manually. Make a table in Word or Excel, or use online resources.
Now there are many mobile free applications that help in budget planning. The main thing is to make it a useful habit, not to try it just once and then forget about it.
Personal budget planning is now more necessary than ever. Prices are constantly rising everywhere and you often don’t realize where your funds have gone. Of course, it is important to know what you should save money on, and what expenses are necessary.
A lot of opportunities to make money (if not almost all of them) come from the devices you own: smartphones, laptops, etc. In case of any malfunctions, don’t hesitate to turn to expert technicians such as the iFix New York team – experts in MacBook repair in New York – to avoid further damage and extend the life of your devices.