4 Budget-Making Tips to Keep You in the Green
Money people would like to have more money. However, most people don’t really know what to do to really budget their finances. This puts them at a significant disadvantage. If you’re in this camp, not to worry.
The following four tips can help you get your finances in the green again:
Prioritize Necessary Expenses
Many people have never been taught how to budget. As a result, they don’t know how to allocate their money properly.
One simple budgeting method that allows you to do this (prioritize necessary expenses) is the 50/30/20 budget.
On this budget, you earmark a full 50% of your income for necessities, like rent, food, gas, electric and the like.
Thirty percent of your budget gets put toward fun things, like a family movie night. Finally, you put 20% of your monthly income into savings.
You can also use this 20% to pay down your debt.
Leftover Entertainment Money Budget
If one of your primary budgeting goals is to put more money into savings, try this trick.
Check your entertainment budget at the end of each pay period.
If you didn’t spend all of the money you put aside for entertainment, then put that extra money into savings or use it to pay down your debt.
Create an Emergency Fund
One of the things that get people into financial trouble is that they don’t have any money set aside for emergencies.
Financial guru Dave Ramsey suggests that people keep $1,000 in an easily accessible account that can be used for emergencies and nothing else.
These emergencies could be car repairs or home repairs or any other unexpected financial emergency.
Once the emergency fund gets used, it’s important that you replace that money as soon as possible so that you always have money in your emergency fund.
Work With a Financial Planner
You may not need a financial planner to help you with your day-to-day expenses, though it couldn’t hurt.
However, when it comes to your big financial decisions, like saving up for retirement or for your kids’ university education, a financial planner can help tremendously.
A financial planner keeps up on market trends and is trained to work with all sorts of financial situations.
More importantly, a financial planner can help you look at your finances with fresh eyes, which allows you to make more objective financial decisions.
Conclusion
Keeping your finances in check requires work and discipline. Most people who are good with money find that they must look at financial health as a life-long pursuit. It’s likely you’ll find this to be the case as well.
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Category: Budget
