Three Easy Ways to Budget and Stop Spending Money
Saving money can seem like an impossible task, and as Christmas draws near (though it certainly feels to me like we should still be in the first half of the year), many of us find ourselves scraping by to try to make ends meet. However, a realistic savings plan can help you get things started so you’re in a better position in the future – even if it doesn’t feel like you’re making much of a difference at the beginning.
You can’t begin to think about what you can save before sitting down and working out what you are spending. Certain things cannot be put off, such as mortgage payments, bills etc. However, making a list of absolutely everything you must spend money on each month can give you a great starting point if you’re looking for ways to save.
Keep track of all your monthly expenses, starting with the major payments right down to your morning cappuccino on your way to work. Once you’ve figured out approximately how much you spend every month, organise those figures into necessary payments and sundry items. Many banking apps make it easy to do this with money managing tools.
Budgeting is not something that comes naturally for many people, and cutting corners to save in the long-term can feel restrictive. In fact, many spenders are even unaware of exactly how much they are being charged by their service providers when they indulge in that bank overdraft or withdraw some extra cash on their credit card.
Once you have calculated your spending each month, it will become much easier to limit overspending by spotting areas in your budget where you can stop spending money. If possible, it’s a good idea to put at least 10 percent of your monthly income as savings. If your expenses are too high to save that much, then you need to go through your current spending carefully to pinpoint non-essential spending so you can start cutting back.
Getting into the habit of saving is the best way to cultivate healthy savings. If you make your savings expense a necessity, just like your groceries, soon enough those savings will start to add up.
Simply saving for a rainy day often isn’t good enough for a lot of people, tempting them to dip into their savings or forgo their saving habits whenever they need a little extra cash. However, if you save money by setting a particular goal, you’ll be less likely to touch that money and more likely to contribute towards your savings fund.
You goal could be something as fun as a vacation or as serious as a down payment on a house. Whatever you decide, having a goal and a timeframe in mind will make it a lot easier for you to save money. Even better, if you decide to make your savings by an automated transfer, you won’t even have to think about saving money, as it will be done automatically for you.