How to Budget and Save Money

Knowing how to budget is a very necessary habit that one should inculcate, to be able to save for a rainy day or simply for an extravagance one would like to treat oneself to. Here's some help...
Money doesn't come easy, and we're all aware of that. Especially in the current financial crisis, it is important that you value the money you get, and save it for tough times and situations. So this time, when you decide you are going to make a budget and save some money, make sure you stick to your resolution. Don't think you will have to give up on all the good things in life. Start by accepting that you are required to make some alterations to your lifestyle, but not to the point where you cannot enjoy your life.

Prepare Your Budget
The first step towards budgeting is to make a note of your income and expenses. Account for monthly expenses, and include a column under miscellaneous (variable/unforeseen) expenses. Also, take into account your quarterly, half-yearly, and annual expenses, so that you can budget for that month accordingly. Demarcate an amount for fixed and variable expenses, and plan your savings accordingly. Make use of this monthly budget template, so that you can clearly chart out your income and expenses. Even if you are walking into a grocery store, make a list and a budget to go with it, so that you don't unnecessarily overspend. This way, you will save money on groceries and add to your savings in the long run.

Start Saving Money
  • Start by giving up your credit card. This is not an outrageous suggestion, but if you don't carry it around everywhere you go, you are likely to use it less. Temptation can strike anytime, and leaving your credit card behind may not be one of the easy ways to save money, but will definitely help you curb this temptation, so that you can save some.
  • If you are someone who uses a credit card too often, choose for an auto-pay facility that will directly debit bill amount from your bank account on time. This way, you will avoid paying any late fees. Use this process for insurance premium, mortgage, and other debt payments too.
  • To save money every month, start with your groceries. As mentioned earlier, walk in with a list and a grocery budget, and make sure you stick to it. Make use of grocery coupons as much as you can, as these all add up to the cause. Find stores that provide special offers.
  • One of the best ways to save money is to try to eat at home. A lot of you may be in the habit of picking up a coffee on your way to work, or just ordering in food because you don't feel like cooking or can't cook. This is where your monthly expenses shoot up, and cause a big dent in your pocket. Make it a point to cook at home. You can learn how to prepare quick meals, and make your own cup of coffee. Not only will you save on restaurant bills, you will also keep healthy and save yourself some huge medical bills in the future.
  • Learn how to prioritize your expenses. Make sure you pay off all your bills first, save some money, and then spend the remainder on your other needs, such as a visit to the hairdresser or that pair of shoes you've been eying for a while.
  • Another great way to save money at home is to try to control your phone bills. If you have a land line and a cell phone, get rid of the land line. It is only cell phones that really ring nowadays, so you really won't lose much if you give up your home phone. Also make sure you choose the best plans for your cell phone, so that you don't end up spending too much unnecessarily.
  • Walk, cycle, skate, or use public transport to get to your destination, but try to limit your use of the car. This is particularly important in case of shorter destinations. A lot of us are used to taking the car everywhere we go, so the amount spent on gas, and the damage caused to the environment is drastic. You will realize the value of this money-saving tip when you start doing it.
When you have figured how to make a budget and stick to it, you will see how much you have been able to save. If you have made a budget, and have managed to spend less than the amount you had set aside for a particular expense, put that saved money in a separate account. Add this to the money you have set aside for the purpose of saving, and at the end of the year, you will see the huge amount accumulated

Don't put yourself in a tight spot by limiting yourself completely. Allow room for extravagance every once in a while amid your frugal living, so that you can stick to your plan.
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