Starting the new year on the right foot is always the desirable choice. Because this site is dedicated to helping young professionals find financial independence and live their best life, I feel like the topic of creating a personal budget is important.
This month will focus on two primary topics with posts: creating a personal budget and preparing for tax filing season. To date, I haven’t focused on budgeting because I first felt the need to enlist some budgeting experts to weigh in with their advice rather than have me offer personal budget plan tips.
January will feature three personal budget guest posts and all of them are great. I’m very appreciative of these kind folks offering their time to submit guest posts to this site for such an important topic.
Going forward, I plan to write more on this topic and provide some of my personal finance ideas on how to manage your money wisely.
Having a personal budget is so important because if you’re looking to improve your personal finances, you need to know where to focus. And to do that, you need to know where your money is coming from and where it is going.
By identifying your income sources and major expense categories, you can establish an understanding of your financial picture and how you can take steps to control your money choices through a personal budget.
With that introduction, I’ll introduce this month’s first guest post on creating a personal budget. The post comes from Grace Taylor at Readies. This is a sponsored post from a company which is the largest completely independent loans review website.
The company believes it is important to provide guidance for consumers facing a complex array of borrowing choices and recognize the importance of creating and sticking to a personal budget to manage your debt. I am grateful to have been contacted by Readies to provide this well-written post on sticking rigidly to your personal budget.
If you’re hoping to gain more control over your financial strategy this year, then one of the best things you can do is start by building an effective personal budget. A personal budget can often be the key to financial freedom.
However, while many of us know money is not the most important thing in life, it is necessary to keep track of our spending. Actually finding and sticking to an effective personal budget can be a lot more difficult than it seems.
The good news is that while money management is tricky for anyone, there are things you can do to improve your chances of success. Here are some of our best tips for sticking to your personal budget and making your money work for you.
1. Choose Your Personal Budget Finance Goals
Sometimes, simply knowing that you should be saving money isn’t enough to convince you to change your ways. When there’s something in your life that you’re really tempted to buy, it’s hard to tell yourself that you can’t have it just because you set some arbitrary rules for your spending habits. However, if you can see a goal ahead, then you’re much more likely to remain motivated.
Think about what you want to accomplish with the money that you’re going to save by budgeting. Maybe you can afford to go on a great family holiday or buy that new kitchen you’ve been dreaming about. Or maybe you need to save money and buy the best engagement ring.
2. Control Your Money by Focusing on Living Within your Means
Becoming more successful with your budgeting habits doesn’t have to mean saving half of your cash at the end of each month towards your end goals. Instead, you can simply start by trying to live within your means. Look at your expenses and find out whether they’re aligned with the amount of money you make.
If you’re spending more than you earn, then that’s a sure sign that something has to give. The only ways to fix living outside of your means it to either reduce the amount you’re spending or increase the amount you earn.
3. Look for Simple Solutions to your Financial Problems
Sometimes, people struggle with budgeting because they think that saving cash is just too hard. However, there are plenty of ways that you can reduce your spending without draining all the fun out of your life. For instance, maybe you could get a part-time freelancing job to give yourself an extra source of income.
It’s also a good idea to make sure that you’re spending as little as possible on your monthly expenses. For example, before you get a loan, check all the loan providers you can find to seek out the best interest rates possible.
4. Save Money in Your Personal Budget by Getting Some Help from the Latest Tech
Plenty of people have trouble sticking to their personal budget. If you’re one of those people, then it only makes sense to get as much help as you can. That doesn’t just mean asking your loved ones for emotional support and guidance. These days, you can also get assistance from your smartphone in the form of budgeting applications.
Budgeting apps can track your spending habits for you, and help you get an insight into where you’re spending most of your spare cash. When you can see where your money is going each month, you’ll find that it’s much easier to change the way you spend. There are even some apps that can make useful suggestions on how to adjust your expenses.
5. Be Realistic with Your Personal Budget
Another reason why people struggle with budgeting is that they don’t know how to be realistic with their goals. Although it might seem like a good idea to tell yourself that you’re going to stop spending money on eating out, if you currently eat out three times a week, it’s unlikely that you’ll be able to make such a drastic change so quickly.
Rather than pushing yourself to accomplish too much too fast, start by making small alterations to your spending habits. If you currently go to the movies twice a month for instance, try going just once instead.
6. Stick to Cash
Finally, while some technology, like the budgeting apps mentioned above, can help with your financial strategy, some make it more difficult to reach your goals. For instance, it’s very easy to overspend when you’re carrying around a contactless credit card that allows you to buy anything at a single swipe.
With that in mind, make sure that you’re managing your spending actively by carrying and using only the exact amount of cash you know you need. When you’re counting every penny, you’ll be less likely to lose track of your cash.