Unless you’re a millionaire or a financially savvy person, you may find yourself struggling each month to pay off your various expenses.
There are many experts out there that claim to have a formula for creating the perfect budget; however, the perfect budget is specifically crafted for your income and your lifestyle.
Here are a few personal finance tips for crafting your perfect personalized budget.
The first thing to do when drafting a personalized budget is to list your monthly fixed expenses. These are expenses that you must pay every month; rent, utilities, credit card debt, car payments, etc.
Next, you need to write down necessary expenses and budget for those. Unlike fixed expenses, necessary expenses are more flexible. You can’t negotiate your rent every month, but money set aside for necessities like groceries or gas can vary month to month.
When budgeting, set aside a maximum amount that you want to spend per month on these necessities.
What You Need vs. What You Can Live Without
Now that you’ve created a basic budget you want to start including extra or luxury expenses. In order not to deplete your entire income and still have money left for rent and utilities, you’ll have to think hard about the things you can cut out of your life.
This budget is crafted specifically for your lifestyle, so think about some of the things you can’t live without. Coffee, weekly shopping trips, eating out are some examples of things you may not want to part with.
For each luxury expense, you want to keep in your budget, consider removing another. After you decided which expenses are worth keeping set a limit you’d like to spend each month. Be realistic. Work within your income.
Even with a budget, you can always save a little money. Comparison shopping is a great way to save money and build smart spending habits. What you do is compare the prices of the items you want or need from online and local stores. You’re guaranteed to find the best deals this way.
There are also tons of other ways to save. Search through the app store for apps of your favorite restaurants or stores. These apps offer customers information on sales, discounts, and coupons.
You can also cut on expenses by trying to renegotiate with your IV and phone companies.
They want your business, and if they feel you’re an unsatisfied customer, you may get a chance to receive special deals.
Pay Off Your Debts
Make sure to pay off your debts while you’re still working and in your prime earning capabilities. Whether they are student loans, your mortgage, car loans or any other sort of debt, you want to be debt-free by the time you are retired.
Home and Car Expenses
You may not need to have a second car when you’re retired. Consider selling it, which will not only save you on gas and insurance but will bring in some extra cash.
Perhaps you do not need to live in such a big house anymore either. Selling your house and moving to a new home in your later years can be hard, but it can also save you a lot of money in property taxes.
Move Somewhere Cheaper
If you are moving, you might want to move somewhere with a lower cost of living. You can also move to another state where taxes are lower.
This will often depend on whether you have family or kids nearby.
Reduce Unnecessary Insurance
In your later years when all your kids have flown the coop, you may not need certain aspects of your insurance. See what you do not need and stop paying for it.
Take Advantage of Discounts
You can always find discounts and cheaper deals online. In addition, some places, such as your local grocery, may offer discounts to seniors.
Look into discounts offered by local establishments. Use cashback cards and sites to get some of the money you spend back.
Gift-Giving Savings Tips
You can enjoy the reasons for the season: time with friends and family, the opportunity to relax, eat and enjoy, and you can do this without a budget breakdown. Here are ways to build an early holiday budget and make next January just another month, instead of doing the panicky shuffle through credit cards bills. For extra tips, contact Bonsai Finance.
Shop Museum Store Sunday and Small Business Saturday
It’s not just Black Friday and Cyber Monday. Museum Store Sunday is new on the scene, with 400 museum stores in all 50 states and eight countries offering access to easy online shopping for their quality merchandise; buying from these shops supports their institutions.
Small Business Saturday, conceived eight years ago, encourages shoppers to buy from family-owned businesses and remember that at one time, all business was local and owned by our neighbors.
Use a Holiday Account Fund Option
These accounts offer a way to deposit funds separate from your checking and savings and receive the money in a lump sum, usually in early November. It’s a sure way to have money available for shopping.
Start a Budget Early and Stick to It
Budget for the holidays as you do for other expenses and include holiday cards, mailing and postage.
Cash vs. Credit
What can you handle best?: Using a credit card means earning reward points and cash back when you shop. It’s also easy to overspend when you cannot see actual money leaving your wallet.
Set a limit on credit card spending low enough to pay off entirely in January; paying interest is giving money to the credit card issuer for using your own money.
Look in your closet for wrapping paper and ribbon before you buy new: It’s rare to use full rolls of paper and ribbons every year. Inventory your leftovers and if you need more, buy right after the holidays at half-price.
Ask Them What They Really Want Before You Spend
Weddings have gift registries, why not the holidays? Don’t buy blind or buy what you think they want; ask first. A homemade or practical gift is a gift from the heart if it’s what they really need.
Shop in Non-traditional Stores for Food Items
Drugstore loyalty programs pay when it comes to holiday shopping. Many chain drug stores now carry packaged and canned holiday food items.
Visit ethnic markets in your area for deals and different versions of familiar foods.
Compare prices from all grocery stores before you shop: Look for buy one/get one deal (BOGOs), free items with groceries and price match guarantees. A little driving takes time but saves money.
Implement These Personal Finance Tips
All these saving and personal finance tips are great, as they give you a wider margin of spending per month, but instead of spending, try saving your extra bucks for unexpected emergencies.
A savings account allows you to budget in for the unexpected.