How To Budget

What is the best way to save up money? The answer is to have a good budgeting plan, which is why this lesson will teach you all about utilizing existing or creating your own budgeting plan.

It’s best to start simple, so here are some general budgeting tips:

  1. Create a realistic budget based on your habits

    Know what you spend the most on, and try to get a good habit of cutting back. Be aware of where most of your spending money is going to. For example, if you’re spending too much on food every month, you could try to eat out less. It is also important to give yourself a realistic goal for how much you want to save. It is better to slowly save more and more than to be unable to follow your first budgeting plan, as you can easily get discouraged when you don’t meet your goals.

  2. Give yourself time to consider purchasing a nonessential item

    Do you really need to buy that new laptop you saw at BestBuy? Often times, the attraction you feel to buying something will disappear if you just wait a few weeks or even a few days. By giving yourself time to consider if you really want something, you can cut back on impulse purchases that you’ll regret later on. If it really is something you want, it’s also good to look extensively at other options in case there’s a better fit for you than the item you initially wanted.

  3. Use a budgeting app

    Budgeting apps are great for keeping track of your budgeting progress and giving you a general picture of how your finances are going. While some cost money, there are great apps that are also free. My favorite is Mint, since it has great tools for creating a custom budget plan(it’s free as well), but here are some great choices to look into.

A simple way to start budgeting well is by implementing the 50/30/20 plan, where 50% goes to necessities, 30% goes to wanted items, and 20% goes to savings and debt payment. This plan is easy to understand, meaning it will also be easier to follow while also giving you the flexibility to change it to match your needs. This tactic might work for many people, but some will find that they need to make changes to their plan, so let’s talk about some specific aspects of budgeting.

Work Less, Save More

Working is tiring, and a lot of the time boring, so isn’t it best to cut back on it if we can? Instead of working more hours when extra money is needed, isn’t it better to cut back on spending instead? It definitely sounds easier to me.

Monthly costs such as subscriptions are a big factor to wasted money, especially when there are so many different services nowadays. If you have subscriptions to Spotify, Netflix, Disney+, Crunchyroll, and Audible regularly, it would cost you 44 dollars a month, or 528 dollars a year. That’s the equivalent of working 40 hours at minimum wage!

Things such as your electric bill can get expensive as well, which means it is important to find ways to reduce spending. Using a thermostat can help save energy, and trying to keep lights off when you don’t need them is also helpful. It is actions like these that add up and end up saving a significant amount of money.

In Summary

Instead of working longer hours, budgeting can help retain more of the money you earn while giving you more time to do things other than work. This makes having a sound budgeting plan incredibly important as it could make your like many times better.

Want more tips?

Here are some videos with more tips on budgeting

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