Whether you’re aching from 2008’s economic whirlwind or not, it’s a good idea to keep an eye on your money. This means spending wisely as well as saving wisely, but it’s easier said than done. Making a budget is worth all the hassle and more, though, and here are some tips to get you rolling.
- Use a household budgeting worksheet.
- Before you can start saving money, you have to have an idea of where and how much money you’re already spending. For one month, carry around a notebook and record all of your expenses as they happen. Organize them according to categories like groceries, household bills, insurance, gas, the like. Record everything very specifically, up to the last Twinkie you got for a snack at the gas station. You’ll start to get a feel for what money you need to spend versus what you could have saved. Little costs like that Twinkie can be mitigated—instead of buying an overpriced snack at the store, you can prepare your own sandwich or trail mix for hunger on the go for half the price.
- Budget your time—after all, time is money. If you waste less time in the day moping in bed or mindlessly browsing the Internet, that’s more time you can spend researching lower rates on bills and other ways to save money. Admittedly, you do need some time to relax, though. A dull saw won’t cut wood. So, use your spare time when you’re drained to revitalize yourself. A good way to do this is:
- Stay busy. It sounds counterintuitive, but a good way to avoid overspending is to keep yourself occupied after work. Get a second job that’s fun and isn’t stressful or volunteer your time at a charity or animal shelter. You can also take up a sport or go for a run—exercise is a known upper. Some people stay busy by window-shopping. Don’t. If you see an item on sale that you didn’t think you needed before you saw it marked off, you probably don’t actually need it, nor will you use it later.
- What you do need to do, however, is budget for emergencies and special occasions. Even though you’ll only see one of the two coming, they’re both going to happen, and some members of your family are not going to be pleased to hear they didn’t get a birthday present this year because you’re “budgeting.”
- Use the envelope system to limit your spending. Divide your total yearly bills into bi-weekly payments. Use an envelope for each bill and put in cash every two weeks. Use only the cash in the envelop until it’s gone and don’t go digging for your credit or debit card. It’s like the serving principle in dieting: if you only put so many cookies on a plate and put the rest of the cookies in the cabinet, you’ll eat the cookies you served and will be less likely to go back to the cabinet for more.
- Take interest into account in your budget, but don’t settle for it. Pay weekly to avoid interest on credit card.
- Speaking of interest, don’t take out a loan to pay back debt. It’s only trading one debt for another, no matter how you look at it.
- Spontaneous expenses are some of the more costly because they accumulate. If you’ve got friends who want to go out for drinks every other night, suggest eating in or having a few inexpensive drinks at home (it’s common knowledge both restaurants and bars are overpriced). Then, next time, suggest eating or drinking at your friend’s house so that you can both carry the burden of the extra groceries rather than have one party mooch off the other.
As you get the hang of it, you’ll think of more ideas to save money and spend more wisely. You’ll stress less and wake up to a brighter financial future.
Maria Rainier is a freelance writer and blog junkie. She is currently a resident blogger at First in Education, researching various online programs and degree programs. In her spare time, she enjoys square-foot gardening, swimming, and avoiding her laptop.