Wednesday, November 13, 2013

Money Forecast: Six Budget Steps That Will Be Useful Year-Round

In these tough economic times, it is more important than ever to make sure that you have budgeting skills. The ability to keep a good budget is the first step on the road to financial health. Here are six tips you can use year-round to keep your budget on track.

Sit Down and Do the Math

The only way to keep a budget is to create a budget. To do this, you need to add up all of your income. Next, add up all of your monthly expenses. Subtract the expenses from your income. The remainder is the money that you can use for optional things like entertainment. Although this step seems easy, if you are not in the habit of doing this it is easy to overspend in small areas that don't seem to make an impact. However, if we are looking at the overall year, small purchases can begin to grow overtime.
Know Your Expenses

Many people do not really know their expenses, which throws the math off on their budgets. If this sounds like you, then you should carry around something to add up your money whenever you spend it. If you do this for one month, then you will know exactly how much you spent that month. Knowing this will make it much easier to set your budget.

Use Computer Budgeting Software

Don’t make it hard on yourself to keep a budget. If you use a budgeting software program like Quicken, it will save you’re a lot of headaches and make it a breeze to keep track of your budget. This will help you get a visual of where your money is going and how you can cut back.

Stop Eating Out

One of the biggest spending leaks people have in their budgets is eating out way too much. If you are guilty of this, try making your lunch at home. Skipping paying for lunch from a restaurant everyday will save you a ton of money.

Protect What You Have

Unexpected expenses can ruin your carefully planned budget. Make sure to avoid this disaster by protecting yourself with insurance. This will prevent you from destroying your budget when the unexpected occurs. Also, be sure to check out home security system to protect your valuables at home. The security will then provide a discount from the insurance companies because you are more likely to be covered during a natural occurrence or a theft, making sure you are covered from every angle.

Treat Yourself

Part of that budget you drew up should include savings, and a portion of that savings should go to buy you something big you want. It could be a car, trip or any other big thing you crave. You need this type of positive reinforcement to keep you on track with your budgeting.

If you follow these six tips, you will find it easy to keep your budget all year. Take it step-by-step and always look for ways to improve your budgeting. The rewards of fiscal responsibility are wonderful.

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