How to Make a Budget and Build Savings
So now you're over a month into the new year, and one of your main resolutions was to save more money. Money to put into your child's college fund, to stash away for a down payment on a home, to buy that new car you know you'll need soon – you name the reason why.
If you want things to go smoothly, first you need to know how to make a budget. Here are some tips that could help you along the path to saving this year and beyond. Even if it wasn't a resolution for 2017, it's never too late to start.
Start From the Start
Consider adopting a financial wellness app to help you understand the basics of creating a budget and carefully track your progress. It can help you to easily add up your total monthly income after taxes and deductions, so you know your take home pay. It also allows you to easily add expenses, including mortgage and rent, utilities, food costs, transportation costs and any other recurring payments (student loans, day care, etc.). Creating a budget helps you understand how much money you have and need to meet your monthly expenses, pay down debt and build your long-term savings.
Save Where You Can
Take a careful look at each of your expenses to see if there's a quick way to cut any costs. For example, if you aren't using that expensive gym membership, cancel it and look for other fitness options. Do you think you're spending too much on food? Reduce your food expenses by meal planning around weekly sales or getting serious about coupons. Cut costs on your phone bill by asking your provider about different plans.
Track Your Spending
Once you learn how to make a budget, remember to update it as your income and expenses change. Be on the lookout for ways to shave money off your expenses, as well as opportunities to make more money. By tracking your spending you'll be better able to pinpoint your weak points when it comes to sticking to your budget. Soon you'll be well on your way to meeting your savings goals.
As the months go by, you may start to see spending patterns you didn't see before – patterns you could take action on by trimming here or there.
Each week, check your app to understand the money you've saved by cutting costs and saving with purpose. A budget only helps if you stick to it, so by relying on technology to help you stay true to your goals, you should be able keep your new savings plan going all year-round.