Assuming that you already have a goal that considers your finances, no matter if it’s a dream vacation, a desire for early retirement or just wanting to get a handle on your budget, there are three basic steps for making your personal finance work for you.
The first rule you have to follow when establishing your personal budget is to always be consistent. That being said, you should also be honest with yourself. Gather together all your utility bills, receipts, and any other proof of payment for every purchase you made in the last month and put it in front of you. If you have the time you can even create charts in order to get a visual overview of your spending, determine where your money is going and evaluate the necessities of certain costs. Now that you know how much of your funds is going where, think about your goals. What can you do to reach them faster? It is important to set minimums and maximums for your spending. Once you’ve done that, see where you can cut even more costs for the benefit of your savings plan. Trust me, it is manageable. Smart budgeting takes time, but it really pays off in the long run. Once you have everything in front of you, you can move on to the next step.
There are many simple ways to save money but the main tenant always remains the same: consistency is key. For example, monitoring your power usage always pays off. If you can remember to always turn off the lights when you leave a room, then you are already saving money. It’s as easy as that. Energy efficient lamps and bulbs can also help you with this. Unplug every appliance when you are finished using it. When it comes to heating, you will definitely save money in the long term if you make some small investments in your home such as sealing all doors and upgrading your windows and insulation. Find out more about how to save on utilities, and as insignificant as it may seem, if you adopt these helpful habits, you’ll be surprised at how much you save.
Also, use your time spent online wisely and save money while shopping. This is a very helpful tip, so be sure look into it. As far as car pooling goes, we are all well aware of the price of gas so organize your trips with friends or co-workers and make them worth your while. Use coupons for food, buy groceries according to weekly sales and organize your grocery shopping so that you can avoid throwing food away.
Credit cards can be either your best friend or your worst enemy. Remember our first rule? It is understandable that after a mortgage, car payments and utilities we aren’t left with many options, and for some months we simply need that extra money. Some things are manageable and could be of enormous benefit. For example, you can see what the effect would be of reorganizing your car payments by trying out this biweekly auto loan calculator. You may find that an extra couple of hundred dollars or so can make a huge difference and that the biweekly method can end up saving you money over time. Micromanaging smaller expenses is always best, but if you can cut some larger costs that you can do without, give it a try, just remember that this doesn’t mean you should stop saving on utilities and basically on every bill with some wiggle room.
Here are three changes that have made an enormous difference for me personally: I took out my landline, started taking yoga classes online instead of at a gym, and stopped smoking. They may be small changes, but they have saved me over $1300 a year.