Saturday, December 31, 2011

Budgeting 101 - Basic Tips on Handling Personal Finance

There are times when you feel that you are always running out of money. You may not notice it, but you have already spent most of your budget for things that you don't really need.
Your first goal is not to save. You just have to make sure that you have enough money to get you from one day to another. When after some time you are already able to earn a little more, you can start setting a budget that includes your savings.

Now, you have to draft your budget for the week or for the month. Make sure to include anything that you will possibly spend on. But, you have to keep in mind to only include items that you absolutely need. Clarify within yourself what your needs or wants really are.
Food will most probably take up a huge part of your budget. The amount can be followed by the money you need to pay bills. This will include your electric bills, water consumption, cell phone bills, etc. Aside from these, there might be some miscellaneous but necessary expenses that you need to allot some amount to.
If you can, follow the same schedule to start budgeting and paying your bills. Once you have established this as a routine, it will be easier for you to keep track of your expenses.
To effectively reduce your expenses, you may want to eliminate some items. If you have several subscriptions, determine if you really need all of them. Sometimes, you can live with only one or two of the subscriptions that really matter to you. A few bucks per month can already make a big difference to your savings.
As much as possible, save for a rainy day. Even if you think that you can no longer set aside just a small amount, you have to make sacrifices. If you can buy that new bag or that new pair of shoes, you can surely save a little amount at the expense of one or two of your wardrobe essentials or non-essentials.
Make use of automated or online financial management programs. These will give you a more organized view of your finances. At first, it can be a little complicated. But later on, you will see the value of these things and you can significantly see the differences they make to your financial standing.
When you see that your income will not be enough when taking into account the expenses that you have, you can sell some of your old or not-so-old stuff. Organize a garage sale. Selling prices are a bit cheap, but remember that the premise behind this is that you can still get money for what they are worth.
Furthermore, try to save on your bills, on the food that you consume, on gas and several other things. When you are able to reduce your expenses for each of these items, you can already save a lot. A few cents to a few bucks every day will create a substantial amount some time from now.

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