Budgeting for Newbies
There’s nothing out there more fun than making a budget, right? Well, we all know that isn’t true, but it doesn’t necessarily have to be difficult. In fact, budgets can be an extremely useful tool when it comes to paying off debt and learning where you can cut expenses. Below, find six ways to create a budget you won’t mind sticking to!
- Decide to do it. Listen, crunching numbers isn’t the most enjoyable thing to do on a Saturday afternoon, but if you are feeling less than in control over your finances, it really is more necessary than you may think. So, make the decision to just do Set aside at least a couple of hours to tackle the task with your spouse and family—you’ll be glad you did!
- Know what you have. Be aware of just how much you have saved and how much money you receive in income. If you have an irregular income, come up with the average amount you made each month over the last 12 months to get a “ballpark figure” of your monthly income. Be realistic and conservative with your estimates—it’s better to have money leftover every month than to not have enough.
- Know your bills. Document your regularly monthly bills, including averages for your utility bills. Be as detailed or general as you feel comfortable—just be honest with yourself. Keeping a log of your daily expenses for a few weeks will also give you some insight as to where you spend money without even realizing it.
- Use tools to help. There are countless tools you can use to enter your tallied numbers. Some people just use the basics, like Excel. Others use web-based tools, such as Mint or Mvelopes.
- Set realistic expectations. Are you really just going to spend $20 a week on food, or $10 a week on entertainment costs? If you’re realistic with yourself about your spending habits, your budget won’t seem so difficult to adhere to.
- Leave room for surprises. Do your best to set aside some money every month for those unexpected or forgotten expenses, such as car repairs or a trip to the dentist. Don’t touch this money unless absolutely necessary. That being said, surprises happen—and they don’t always happen at “convenient” times. If you don’t have enough money saved for an unexpected expense, avoid payday lenders that charge very high interest rates. NHCash offers a better alternative to payday loans, with lower interest rates, flexible payback options, and the ability to rebuild your credit score over time.
Finally, be proud of yourself for taking the steps necessary to secure your financial freedom! It’s estimated that less than one-third of American families have a budget at all; you’re realizing it’s the responsible thing to do, and you’re taking action! Great job!