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Basic Help on Saving Money and Budgeting
Lets face it. Times are tough. The economy isn't doing too well at the moment and it's getting harder to save money. Times like these call for drastic changes to our lifestyles. (That is, if you wish to stay a float, financially) This is why I will be explaining some of the basic principles of saving money and budgeting in this hub.
In order to save money efficiently, you need to know how to spend your money wisely. This is very important because it will keep you from spending what doesn't need to be spend and only what is necessary. Keep in mind, if you are truly serious about saving money, you need to understand that those splurging days are over. Get in the mindset of being poor.
The wise spender...
always puts needs above wants
is organized and has a plan (physically or mentally)
thinks about every purchase as if he were using his last $5
is not afraid of generic brands
always keeps money put aside and knows what he or she is spending
These are all traits of a wise spender, someone who is responsible with his or her money and knows exactly how it is going to be spent or if it will be spent at all. Now, keep in mind that being a wise spender doesn't mean you have to be a cheap person. If your funds are budgeted right and your expenses allow for the better brands, that's fine. Just make sure it fits your budget.
Life's too short. Why should I save my money?
Well, the fact of the matter is, life isn't really as short as you think. If you don't plan on being around in the next few years, then by all means, party like a rockstar. But, if you are like most of us, who hope for a better future, a financially stable future, then I suggest you start putting some money aside. Like I said before, it can only help you.
If you put $5 aside every week, in four years you'll have a little over $1000. It doesn't sound like much but I'm sure you'll find some use for it. Saving money isn't necessarily about making money. It's about preparing for your future or the future of your loved ones. Believe me, it feels great to be prepared.
A little cutting back goes a long way.
No one said living frugal was easy, especially if your used to the finer things in life. I know it can be hard switching from Captain Crunch to Lieutenant Crunch or Cheerios to Toaste-O's. However, these are changes you have to be willing to make in order to save money. A little cutting back goes a long way. Instead of eating out every other day, cook something. It's cheaper and your not wasting precious gas just to have gas later that night.
Drive less. Don't be afraid to take the bus at least a couple days out of the week. Also, turn off electronics that your not using such as the computer, the playstation, lights ect. This helps your energy bill. The little things always help.
Two Books I Highly Recommend
Set your spending limits.
The most important principle in managing your money is knowing exactly how much you have, how much is tied up in bills and how much you can and need to spend. This can be difficult at times, especially when your planning for the entire month and you have to feed four kids.
The first thing you need to do is give yourself an estimate of about how much your willing to set aside this month for savings. For the sake of this hub, we'll say $50. What you need to do now is sit down, grab your paper and pen, take a couple of deep breathes and write down the exact amount of money you have. This includes whats in your pocket, bank accounts, under the mattress, in the safe, every last cent. Next, you need to write down all of your expenses. This includes bills, rent, food, household supplies, everything that you'll need for the month in detail. Write down how much you need to spend (rent, bills). Then, go over everything else and try your best to find a cheaper solution to what you wrote down. For instance, if you wrote toilet paper at $40 a month, then do some research and find a less expensive alternative that still suits your needs. Your goal is to accumulate $50 or more in total savings. Your writing should look something like this:
Rent and Bills
Total Savings = $101
Also, if you're having trouble writing out your budget, then I highly suggest using Mint.com. They provide a completely free budgeting tool that does all the budgeting for you. You simply just fill out your information.
Checking or savings accounts
One very important tool that you'll eventually want to have is a checking account or at least a savings account. This gives you a safe place to keep your money. If you are using a checking account, your money will actually gain interest the longer it sits their. Checking accounts make it much easier to manage your money and even allow you to pay your bills without actually touching your money. Of course you will usually receive some sort of checking card that allows you access to the money in your account. Just remember, money is more important than it's ever been. Keep it safe. Get a checking or savings account if you don't already have one.
You'll Be Fine
Just remember these simple steps and you'll be fine...
always have a plan before you purchase anything.
know your spending limits.
stick to your spending limits.
set a goal for how much you wish to save that month and stick to it.
For more help with budgeting and saving money, check out some of these other hubs that I have personally found useful.
Well, I hope you enjoyed this hub on the basic principles of saving money. Being a wise spender always pays off. “Dueces”