While you might be tempted to simply say, "carpe diem," and spend your money as you earn it, this attitude won't be particularly helpful if you encounter some unexpected expenses such as major car repairs or medical expenses. Creating a workable budget can actually make your life more enjoyable rather than simply restricting your spending. Here are a few budgeting tips that will help you meet your current expenses and put a little money away for the future.
The first step in budgeting is to have a clear idea of your income, which is pretty simple to determine, as well as your expenses. The latter part is a bit trickier. While you obviously know how much you spend each month on some expenses, such as rent, insurance and your cell phone, you also need to determine how much you spend each month on cable, internet, cell phones, utilities, insurance, food, gasoline and all the other expenditures you make each month. Make a list of everything, and you should use all of your credit card statements and bank statements for reference.
Once you truly have a clear picture of how much you spend, you can determine how much money is left over. If it's not enough to budget some for future savings, then you'll need to find ways to cut back. One of the biggest mistakes people make is not paying off their credit cards each month. Credit card companies charge huge rates of interest, and this is money that you are just throwing away. So pay off the balances as quickly as possible and quit using most of your credit cards. You can usually get by with just one card, so just keep the card that provides you with the best reward offerings and pay off the balance each month. If you have trouble with this, just leave the card at home and bring cash instead. If all you have is cash, you simply cannot pay more than you can afford.
Being frugal is often much healthier. For example, consider how much money you spend on fast food or unhealthy restaurant food. Cook your meals at home, pack a lunch and bring your own coffee to work, and you not only will you save a bunch, you probably will eat much healthier food. When you do go grocery shopping, write out a list and stick to the list to keep costs manageable. Entertainment expenses often can be lowered as well, such as eliminating cable and watching TV online with a cheaper movie and TV streaming service. Your cell phone plan also might be able to be adjusted to a less expensive plan. Even turning off your lights and lowering your water usage can be an easy way to save some extra money.
Once you cut expenses, you should have some extra money to set aside for the future. Planning for your retirement is essential, and it is wise to think about putting away at least 10 to 15 percent of your earnings. Many companies offer either a 401 (k) plan or an Investment Retirement Account or IRA, so consider having a portion of your income set aside in these accounts each month.
Other options to consider include looking at investments in mutual funds. These types of funds have the potential to pay a higher rate of interest than any savings account or certificate of deposit, but are less risky than gambling on a single stock or bond in the market. Mutual funds are diversified to lower the risk, which simply means that the fund includes stocks from many different companies, so that if one company is not doing well, chances are that others in the fund will be and this keeps profits steadier. There are many types of funds, from those that focus on an area of the globe, such as an Asia fund or those that focus on a certain type of industry, such as a green energy fund or energy fund or a currency fund.
The first step in budgeting is to have a clear idea of your income, which is pretty simple to determine, as well as your expenses. The latter part is a bit trickier. While you obviously know how much you spend each month on some expenses, such as rent, insurance and your cell phone, you also need to determine how much you spend each month on cable, internet, cell phones, utilities, insurance, food, gasoline and all the other expenditures you make each month. Make a list of everything, and you should use all of your credit card statements and bank statements for reference.
Once you truly have a clear picture of how much you spend, you can determine how much money is left over. If it's not enough to budget some for future savings, then you'll need to find ways to cut back. One of the biggest mistakes people make is not paying off their credit cards each month. Credit card companies charge huge rates of interest, and this is money that you are just throwing away. So pay off the balances as quickly as possible and quit using most of your credit cards. You can usually get by with just one card, so just keep the card that provides you with the best reward offerings and pay off the balance each month. If you have trouble with this, just leave the card at home and bring cash instead. If all you have is cash, you simply cannot pay more than you can afford.
Being frugal is often much healthier. For example, consider how much money you spend on fast food or unhealthy restaurant food. Cook your meals at home, pack a lunch and bring your own coffee to work, and you not only will you save a bunch, you probably will eat much healthier food. When you do go grocery shopping, write out a list and stick to the list to keep costs manageable. Entertainment expenses often can be lowered as well, such as eliminating cable and watching TV online with a cheaper movie and TV streaming service. Your cell phone plan also might be able to be adjusted to a less expensive plan. Even turning off your lights and lowering your water usage can be an easy way to save some extra money.
Once you cut expenses, you should have some extra money to set aside for the future. Planning for your retirement is essential, and it is wise to think about putting away at least 10 to 15 percent of your earnings. Many companies offer either a 401 (k) plan or an Investment Retirement Account or IRA, so consider having a portion of your income set aside in these accounts each month.
Other options to consider include looking at investments in mutual funds. These types of funds have the potential to pay a higher rate of interest than any savings account or certificate of deposit, but are less risky than gambling on a single stock or bond in the market. Mutual funds are diversified to lower the risk, which simply means that the fund includes stocks from many different companies, so that if one company is not doing well, chances are that others in the fund will be and this keeps profits steadier. There are many types of funds, from those that focus on an area of the globe, such as an Asia fund or those that focus on a certain type of industry, such as a green energy fund or energy fund or a currency fund.
About the Author:
Cleveland Jernigan likes blogging about investments. To get further information about a Renminbi bond fund or to find out more about global energy funds, visit these fund websites now.
No comments:
Post a Comment