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.
After you have determined how much you spend each month, figure out how much money is leftover and look at ways to curb costs in the future. Credit card debt is absolutely one of the biggest expenses for most people, so paying off this type of debt should be a huge priority, as the interest rates generally are ridiculously high. Keep just one credit card and cut up the rest, paying off the balances. Select a card that offers the best reward system and plan to pay off the balance each month. You can reduce credit card payments by simply not using the card and bringing cash with you instead. This forces you to only spend what you have at the moment.
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.
After you assess your budget and trim off some fat, it is time to think about saving a portion each month. This can be money saved to cover unexpected expenses, but also you need to be saving toward retirement. If your company offers a retirement plan, such as a 401 (k), then arrange to have a portion of your money each paycheck deducted and placed into this account. Generally, it is wise to save at least 10% of your earnings toward the future and certainly more if you can spare the money.
Another option, or an option that can be combined with our retirement account savings, is to consider investing in different types of mutual funds. These funds allow you to take advantage of potential earnings in the stock market at much lower risk than you would incur were you to buy stock in just one or two companies. A mutual fund includes investments in many different holdings or companies to help minimize the overall risk. There are many types of mutual funds, from those that invest in a particular type of industry, such as a technology fund or an energy fund. Other funds invest in particular area of the world, such as a China fund or perhaps a South America 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.
After you have determined how much you spend each month, figure out how much money is leftover and look at ways to curb costs in the future. Credit card debt is absolutely one of the biggest expenses for most people, so paying off this type of debt should be a huge priority, as the interest rates generally are ridiculously high. Keep just one credit card and cut up the rest, paying off the balances. Select a card that offers the best reward system and plan to pay off the balance each month. You can reduce credit card payments by simply not using the card and bringing cash with you instead. This forces you to only spend what you have at the moment.
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.
After you assess your budget and trim off some fat, it is time to think about saving a portion each month. This can be money saved to cover unexpected expenses, but also you need to be saving toward retirement. If your company offers a retirement plan, such as a 401 (k), then arrange to have a portion of your money each paycheck deducted and placed into this account. Generally, it is wise to save at least 10% of your earnings toward the future and certainly more if you can spare the money.
Another option, or an option that can be combined with our retirement account savings, is to consider investing in different types of mutual funds. These funds allow you to take advantage of potential earnings in the stock market at much lower risk than you would incur were you to buy stock in just one or two companies. A mutual fund includes investments in many different holdings or companies to help minimize the overall risk. There are many types of mutual funds, from those that invest in a particular type of industry, such as a technology fund or an energy fund. Other funds invest in particular area of the world, such as a China fund or perhaps a South America fund.
About the Author:
Cleveland Jernigan likes writing about investments. For further information about a Renminbi bond fund or to know more about global energy funds, visit these fund websites today.
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