Everyone has unexpected expenses pop up sometimes, and yet, many people don’t have any savings stored for when these inevitable emergencies rear their ugly, expensive heads.
Now, this isn’t because people aren’t thinking ahead, or because they don’t like security, or think no fiscal issues will ever happen to them.
But then, why doesn’t everyone save up? Why are so many living so dangerously?
The truth is it isn’t a personal fault or flaw, but that many simply do not have the means to save money with their current spending and pay.
Thus, the beauty of a budget.
If you are having trouble saving money, or simply balancing your bank account each week, then consider a budget to help you manage your money better, and even sock a little away for a rainy day – or emergency.
See VIP Finance of Texas’ four steps to creating a budget that will truly work!
Step 1: Pay Yourself First
This doesn’t mean you have to put $250 away a week, or even $100, even $50. But this does mean you have to put something away each time you get paid.
Weekly, bi-weekly, monthly?
It doesn’t matter, what does matter is that as soon as you see that deposit clear into your account, you move some designated amount into a savings account.
You won’t see it in your checking account, so you won’t use it. This principle is simple and has stood the test of time.
Even $20 weekly adds up to major savings when you stick to the plan and always pay yourself first.
Step 2: Know Your Outgoing Money
Start seeing where your money is going.
Maybe you fully know this already, or maybe you’ll be surprised by how much you spend on coffee or parking. Maybe you’ll see that your food bill or restaurant spending is a little higher than you imagined.
Until you see where everything is going, and how much, and why, and when, it can be difficult to create a true budget.
Step 3: Organize You Outgoing Money
Now that you’ve tracked your spending, it’s time to organize it all.
After all, it doesn’t help you if you know you spend $32 dollars at Starbucks each month but forget to combine that with the $77 dollars you spent at your neighborhood coffee chain.
Put all of your expenses with their fellows. Try categories like;
- Auto (payments, insurance, car washes, maintenance & gas)
- Utilities & Bills (water, health insurance, cable, Netflix, electric & cell phone)
- Loans (student, pay-day advance, title loans or credit cards)
- Groceries & Dining (it can be good to divide bars, restaurants & groceries)
- Rent or Mortgage
- Other (shopping, gym membership, gifts, miscellaneous, etc)
Try using a money management app like Mint or even your bank’s app if they have one. The tools many of these apps have to check – in real time – your spending, savings, trends and how much goes into which categories can really be a life-saver when you’re trying to organize all your expenses from week to week or month to month.
Step 4: Compare, Contrast, Adjust & Repeat
The final step is your ongoing step, you’ll have to compare your outgoing money to your incoming money. You need that incoming number to be bigger or you’re sure to have trouble in the future, even without any one-time extra expenses popping up.
With Christmas coming up, and the season of giving becoming more expensive each year, it is important to have a solid budget going into the holiday season, so you aren’t feeling the post-festivity blues.
Follow these steps and bask in your financial stability!
Need Financial Assistance? Talk to VIP Finance of Texas!
If this budget advice is coming a little late, or you need a little extra to get a jump start on your Christmas shopping, then call or visit one of our six locations today! Or check out our blog to see more finance tips.