Creating a budget is one of the easiest ways to ensure that you manage your money better. More often than not, this is easier said than done. There are also always ways to improve your spending and save quite a lot of money in the process.
A few tips on how to budget your money wisely:
Track your expenses for at least a month. You can use a smartphone app, a computer program or by going back to basics and using simple pen and paper. Make sure that you record every purchase so that you know exactly where your money is going.
Learn to moderate. A good thing to keep in mind when you want to budget your money wisely, keep in mind that it’s not about cutting everything out that gives you joy in life. It’s about allocating your money better.
A good rule of thumb is to allocate at least 10% of your earnings towards savings. If you want to save even more, aim for 15%.
Dedicate 35% of your earnings towards housing and utilities.
Keep in mind that using credit and debit cards to pay often makes it very easy to overspend. A good way to curb your spending is to use cash to pay whenever you can.
A good budget can help you settle your outstanding debt. The golden rule is to make sure that you pay off the debts with the highest interest first.
Documenting a year’s history can help you get an accurate view of your average monthly revenue.
Stick to your budget and don’t overspend. Keep track of every cent.
Try to reduce your expenses. Assess where you are spending too much and cut unnecessary expenses.
Pay off your credit card balances every month.
Try switching to cash payments for most weekly purchases.