You can do a lot more with your finances if you learn how to properly budget and save. You could go from sitting at the house watching television during your paid time off of work to taking a nice vacation with the spouse. You can do much more with your life if you learn how to handle your money like a pro. I’m going to give you 3 tips that if done correctly and steadily will be very effective. Some of these tips may seem obvious; however, too many people fail to do them!
1. Learn To Budget – As painful as it may be this all comes down to the old fashion way of grabbing a pen and a piece of paper and doing some math. Figure out your average monthly income and write that number down. Then, subtract all your bills. After that, take 5% or 10% of the remainder and add it into your savings account. Finally, you have to reward yourself. So hopefully you have something like $300 left, so take $100 and use that for recreation and put the remaining $200 into your budgeting or reserve account. Be sure to realize that life and finances is subject to change. So make this a reoccurring thing. I create a new “Budget List” about once every 3 months.
2. Expect The Unexpected – Things happen. Whether we like it or not, that’s just reality. You have to have the willpower to set aside some amount of money each paycheck into your reserve account. You still should also set aside a certain portion and put it into your savings account but if you put all your budgeting money and saving money into one place you won’t be building as much interest as you should be once a tire goes flat or you need an oil change or whatever else. Budgeting and saving are closely related but they are not the same thing! You do not want to have to spend the money you have been saving. The purpose of the money you have been budgeting is meant to be spent when needed.
3. Become Debt-Free! – This tip is very rewarding and so underestimated! Pay down your debt! I understand that by making investments you can one day become rich. But is becoming debt free not an investment? It’s an investment in yourself and future! Once you become debt-free investing will be much easier as well. So don’t feel like it’s an awful idea to pay a little extra every month. Of course, residual bills are inescapable but temporary bills are not such as a credit card or car payment.
There’s a ton of other tips on things you could be doing to budget better. These three are just ones that I have found to be effective in my own personal life. If you do happen to follow these tips you will see the results! If you follow these tips for two days and then stop, you probably will not see results. It is your decision to budget like a pro, become debt-free, and to be expecting things to happen. It’s also your decision to make the most out of your income and achieve financial freedom.