December 2, 2020 2 min to read
How to save money: budgeting tips everyone should know
Category : Finance
Oftentimes, the most difficult thing about saving money is getting started. This is because budgeting has gotten a bad reputation. Many people view it almost as a straitjacket – a way of cutting out all the fun in your life.
In reality, budgeting doesn’t restrict your freedom. It gives you freedom. A budget is simply a plan for your money.
Instead of going through every paycheck with just a vague idea of where it goes, you gain an understanding of your spending habits, and you can allocate the money you worked so hard for toward something you genuinely about.
It’s an essential part of taking control of your life.
If you’re reading this article and trying to learn how to budget, it probably means that you spend too much money somewhere, but you’re not quite sure where.
Whether you want to get out of debt, achieve long-term saving goals or simply develop healthier spending habits, you will see our tips will help you get a hold of your finances without making you feel constrained.
The first step in learning how to save money is figuring out where it all goes. For the next couple of months, all you have to do is track your spending.
This includes rent, utilities and any debt you may have, but also any other expenses. Write down how much you spend on groceries, gas and going out. Even if you go to the store to buy yourself a cup of coffee and a granola bar, write it down.
A dollar here and there adds up, and you’ll be surprised how expensive these small purchases can get in the long-term.
To track your spending, you can either use a traditional notepad and pen or your smartphone. There are a ton of free apps out there that were created specifically for this purpose.
Once the two months are over, you can divide your expenses into categories and draw conclusions.
At this point, you should have a clear idea of your spending habits, so you can look for areas where you and save some money.
You can start by cancelling subscriptions you’re not using. We all have at least a couple of those. They renew automatically, so we simply forget about them.
Still, even if it’s $10 or $20 per month, in a year, it will be $120 or $240. Why spend that money on something you don’t use?
Next, you’ll want to divide your expenses into needs and wants. Needs means rent, mortgage, debt repayment, utilities, groceries and medical bills. You can reduce some of your spending here as well. For example, if you have credit card debt…
Continue reading the article and learn more about budgeting on Daisy Linden’s blog.