With still stagnant salaries thanks to the recession, careful budgeting is an important part of most American households. After all, you need to know how much money you have left over after necessary bills like the mortgage and electric bill before you can take a road trip or go on a shopping spree. Here are seven tips to help you plan your family’s personal budget so you can make the most of your income.
1. Start saving: Put some money into savings every month, even if all you can spare is $15. The financial cushion provided by a savings account comes in handy if the air conditioning unit breaks down or if your child needs braces. If there’s one thing you can count on, it’s that financial emergencies will come up.
2. Create a unique budget: Everyone earns different salaries and has different expenses. Even if a friend has worked out a successful budget plan and is willing to share it, you’re better off creating your own budget specifically based on your finances.
3. Set up multiple bank accounts: When you get your paycheck, you can sort it into various bank accounts titled “mortgage,” “utilities,” “groceries,” “entertainment” and more. That way, you know exactly how much money you have allotted for each living expense, which may help you stick to your budget.
4. Review your credit card bill: Take a close look at where you’re spending money. You may find things you can easily cut. Spending too much money at restaurants or the movie theater? Now you know that staying in more often can help save.
5. Add in some wiggle room: Breaking the rules on occasion is part of human nature. So, setting yourself up with a very strict budget is just setting yourself up for failure. Make sure there’s enough in your “entertainment/leisure” budget to account for the spontaneous latte or an impulse purchase.
6. Bring in some funds: Cutting back on expenses can only take you so far. Sometimes the answer is that you simply need more money. Consider selling old things you no longer use, mowing an elderly neighbor’s lawn, doing some extra part-time work or other tasks to bring in extra cash.
7. Reward yourself: Sticking to a budget isn’t always easy, so be sure to treat yourself for your efforts. Eating lunch out on Fridays may be enough of a reward to keep you going strong, or maybe you’d rather hold out for a nice annual vacation. Whatever you prefer, make sure you budget in the occasional reward.
Need a little help with your finances? Call our agency for personalized assistance with your financial needs.
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