About 74% of Americans have credit card debt. And if you’re one of them, it is time to learn how to start and stick to a budget.
Budgeting isn’t just the key to getting out of debt, but to achieving financial health, and preparing for your future.
Learning how to manage your money is a lifelong process. Read on for our top 5 tips for money management below!
The start of every budget should include determining your reliable and regular income every month. If you have income that is variable or inconsistent, don’t include that in your regular income.
Next, think about what expenses you have that happen monthly and have a set cost. This could include but isn’t limited to:
Then consider other recurring expenses that don’t always cost the same:
With these non-fixed expenses, identify a goal for spending and don’t spend more than your goal.
The basic of budgeting is that if your expenses are higher than your income, then you need to remove or reduce your expenses.
If you have extra money after your monthly expenses, that becomes your fun money or added savings.
No matter what stage of life or financial health you’re in, an absolutely necessary part of your budget should be a savings account. It doesn’t have to be a lot, but it should be a consistent set amount every month.
You should also determine what expenses you’re allowed to use your savings account for, like:
Most experts recommend that you have 3-6 months worth of living expenses saved in case of job loss or emergency.
A great way to stay on budget and manage your money is to have a side job, often referred to as a side hustle.
These take the form of freelance work that you can do from home or in your spare time.
Whether it’s driving for Uber in your free time, or writing Instagram captions for influencers, there are so many ways to make money on the side.
You can think about side hustles like free money.
A key part of making managing your money is to pay down debts. There are several methods of paying down debts.
There are several methods for paying down debt. The important part is to stay consistent and try to pay off as quickly as possible. The longer you’re paying off debt, the more interest you owe and the money you lose.
Keep a reminder card in your wallet that encourages you to think before making purchases.
Set an alarm on your phone for a specific time of day when you’re more likely to shop online and remind yourself of your financial goals.
Don’t let yourself forget what your financial goals are. Constant reminders are a huge benefit to those wanting to stick to a budget.
The sooner you start your budgeting process, the sooner you’ll enjoy the savings and benefits. Learn how to manage your money now.
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