publive-image

You know you need to make a budget, but if you're like most people, the thought of sitting down and doing it isn't very appealing. There are many good reasons to do it, though. You'll be able to identify where you're wasting money and redirect that cash toward things you want. You can also stop worrying about what you can and can't afford. With the tips below, you can get started and make your money go further.

Track Everything

This might be the most unappealing element of creating a budget for many people simply because it sounds so tedious, but there are apps that can help you do it. Tracking is important because it usually reveals surprises about where your money is really going. While you can start making your budget with just a month or two of information, doing so for longer can give you information about infrequent or annual expenses as well as the regular ones.

Break the Credit Card Habit

One of the best things you can do for yourself is stop using credit cards if you can't pay off the balance monthly. This helps you avoid mounting interest that can become overwhelming. If you're in a situation where you need money for something that you can't currently afford, a much better solution might be to take out a personal loan. You can go online to research options more about personal loans and lenders to decide if this is a solution that would suit you.

Don't Be Rigid

One common mistake that people make is thinking that budgeting means that they aren't allowed to ever have any fun again. You can still live a luxe life on a budget if you are smart about it. It's not about cutting all discretionary spending out of your life but about making sure that your discretionary spending is reasonable and on things that you want. You'll commonly hear that a typical budget drain is expensive daily coffee drinks. But if those daily coffee drinks genuinely make you happy and get you out of bed to go to work every morning, you don't have to eliminate them. Your budget should be about what works for you.

Have an Emergency Fund

One fender bender, home repair or medical incident not covered by insurance can destroy a carefully constructed budget. This is why you need to work on building an emergency fund that you can turn to when the unexpected happens, and while you may not be able to predict what and when it will be, there always are unexpected expenses. Start with a few hundred and build up to enough to cover a few months of expenses.

Make Adjustments

Your budget is not a static thing. It's a document that you can and should refine as your spending habits, income, debt situation, and other factors in your life change. You don't have to keep tinkering with it if it's something that causes you anxiety, but you should go back and review it a couple of times a year to make sure that it's still something that works for you and revise it if that isn't the case.