Most people can manage with budgeting their finances but run into issues when the unexpected happens. Emergencies happen, so being prepared for it can make a big difference when it actually occurs.
Making and sticking to a budget is the best way to prepare yourself for that unexpected event which can create financial stress.
What do you want? Maybe you want to save for a new house or bigger apartment. Maybe you need to get out of debt, get married, or need a new car.
Once you have a goal in mind, it becomes easier to see how much money you will need, so you will have a better idea of how to achieve it. A plan will become clearer when you can see it written down. It’s important to know how much you will need to put back each month to achieve your goals.
Take a good look at what you spend money on each month. That includes bills, groceries, gas, entertainment, dining out, cable tv, shopping and anything else that you can categorize.
There are a lot of things we buy each month that we don’t really need. Subscriptions, expensive clothes, snack food, video games, dining out and other things that make us feel good but are expensive.
You don’t need to live like a monk in order to stick to a budget and save a bit of money, but it will require discipline. Cut the cable package and get basic or stream your shows online to reduce costs. Buying off-brand food and clothing can save quite a bit. Cut out the manicures, expensive hair treatments or going to bars and restaurants frequently.
Total up all the income that you have. If you have two incomes, two people working, if you have a few jobs, or even if you live on a pension or disability. Then, write out all the bills and debt that you have currently.
When budgeting, put the most important ones at the top. The bills you need to pay and the necessities for your everyday life. This needs to include money for your goals so you can save for them.
If the expenditures are more than the income, you’ll need to cut until they aren’t. Remember, this is a long-term plan, not a quick fix so you go back to your old habits.
If you have loans, credit card debt, or any other type of payments you need to make that charge interest, pay them down or off. If you are deeply in debt, you can consolidate these and then have one payment per month.
Once your debt is lower or gone, you will be able to breathe much easier. Get rid of your credit cards and try to stick to the budget as much as possible. This will not be easy, so be prepared for it not to happen every month.
Take advantage of warehouse buying, avoiding brand names, making your own snacks/lunch, discount stores, and using coupons whenever possible. There are several apps for your phone that can assist with discounts these days.
You still need to have fun, so budget for that, but instead of movie night out, have movie night in. Make your own popcorn, watch a DVD, or make your own pizza. Entertainment can still be possible, it just might look a little different while sticking to your budget.
It’s important to remember budgeting won’t be easy. It’s also important to understand that there will be times when it’s impossible to stick to your budgets. Emergencies and life, happen.
If you need help with an unexpected event in the short-term, why not contact us here at Lending Bear. We can help you get through a small emergency so you can get back to your plan.