This blog was written by our guest blogger, Jared!
Do you ever feel like you're barely scraping by, month after month? Like no matter how hard you try, there's never enough money left over at the end of the day? You're not alone. A lot of people are struggling to make ends meet these days. But don't worry, there are ways to manage your finances and live on a budget. It takes some effort, but it's definitely doable. Below are some ideas and tips to help get you going.
- Create a budget. The best way to live by your own personal means is to create a personalized budget. Allocating your money to certain areas will keep you organized and on a mission! In your budget, factor in bills, leisure, savings and investments, retirement and anyone who is a dependent. This will allow you to hold yourself accountable for the amount that you spend and what you spend on. A lot of people use their money on unnecessary items or spend on a hunch. All these unnecessary purchases can bring you into a financial slump.
- Organize your bank accounts. After determining the amounts you’re going to spend in your new financial plan, you need to figure out the amount of bank accounts needed to keep it organized. An ideal amount of bank accounts is 4. You will need a checking account for bills. Use this account to pay for housing, utilities, insurance, car loans and any other bills that are necessities. You will need a second checking account. This will be for everything besides your bills. Whether its entertainment and leisure, lunch at a restaurant or a present for a loved one’s birthday. The third account is an emergency funds saving account. An emergency fund is extremely necessary for the rainy days. Try setting aside three to six months of necessary expenses worth of money. In life a lot happens, with an emergency fund, you will be prepared for the unexpected. Lastly you’ll need a second saving account for your big saving goals. Saving for things such as a down payment on a new house or car, wedding expenses or other business ventures.
- Watch your expenses. Be sure to live within your means! Do not step out of your pay bracket and attempt to purchase things that you are unable to afford. It's a good idea to keep track of where your money goes at the start of the budgeting process and at regular intervals throughout. This tells you whether your strategy is working or not. Keeping track of your spending doesn't have to be difficult.
When you start living on a budget, you'll notice a difference in your mood. You'll feel lighter, sleep better, and worry about money less. Take some time to notice the difference between how you feel today about money management and how you felt when you first started. Make appointments with yourself to check in on how your financial plan is progressing. Consider what has worked well in the past and what isn't currently working properly. What changes can you make to make your life easier? Reflection should be your best friend when trying to progress financially.