There’s about a week in every month for every person where your mailbox becomes the most prominent concern in your mind – because it’s about time for your credit bill to show up and say how much you owe. Maybe it shows up by email instead of by paper, but the feeling is still the same: and when that email or letter finally arrives it comes with the appropriate feeling of nervous anxiety as you open it up to take a peek inside.
And sometimes that bill comes in heavier than expected – a crazy phone bill o a high credit bill can hit like a truck, but you can work in ways to keep this kind of thing from happening. With a few personal budgeting tips and a bit of commitment you might be able to avoid those unpleasant surprises.
Figure Out How Much You’re Worth
It’s important for you to know how much you are in net-worth – not necessarily for credit or determining how much you can spend a month, but to figure out how much you owe, how much you have, and how far you are to having a positive amount of capital. This isn’t as much a personal budgeting tip as it is a good life tip of you live in a nation that’s involved in the global economy. Take how much you have, subtract your loans, and see what you get: and you might be surprised to find that you have a negative worth! Don’t worry too much about it: you can get on your feet yet.
Figure Out How You Spend Your Money
It can be a pain to manage how much cash you have, so it’s a good idea to start at square one. Set aside a notebook, a folder, an excel spreadsheet – whatever is most comfortable and easy to keep on hand – and start making note of how much money you’re spending over the course of a day, where it’s going, and how it was spent (was it spent using one of your credit cards? A debit card? Did you pay a $1.50 fee at an ATM to withdraw some cash, then spend the money on groceries?). Knowing how much money you’re spending is a key personal budget tip; where it’s going and how it’s happening can make sure you keep the bigger picture in mind and don’t let things get out of hand.
Put It All On Paper
There’s nothing wrong with keeping your files digital – but for a personal budgeting tip? You want to have a paper backup. It’s easier to look at than on a computer screen, and it’s easier to sort through a hard copy file than it is to go through a folder on your desktop (especially if your computer is disorganized – icon clutter is real and difficult!). Whether you print out from your machine or write it down by hand, make sure that this list of how much you spend is all somewhere on paper, in a folder labeled expenses or something to that effect. It’ll help you out in the long-run.
Do Not: Copy A Friend’s Budget
This is one of the worst things you could do. Maybe you think that you and a friend live roughly within the same means, so you decide to use their budget as inspiration. It either isn’t enough, or it’s too much for your means: we’re all different human beings with different likes and needs. The only place for you to start with your personal budget is at you: show some responsibility and don’t be afraid to take your budget by the reins.
Do Not: Be Strict
You want to be financially responsible: you do not want to be a slave to your budget or the same reason that you don’t want to be a slave to your debt. Give yourself a percentage on your budget of wiggle room, and make sure that you put some cash aside every month as a rainy day or emergency fund. You never know when you’re going to have to shell out for a home or car repair or unexpected doctor bill, or when you might have to leave the city to visit friends or family in other parts of the country or world.
Figure Out What You Want
Set milestone goals for every year or so – at the beginning claim what you want. Do you want enough funds that you could live comfortably for a few months without income? Do you want to have something that you can put into investment, or do you want to be 10% toward a ten year goal like your own house or apartment? Start off small and start going toward bigger things in the future; short term and long term both.
A few last personal budgeting tips…
- Don’t be afraid to be flexible. Are you spending too much every month? Change your budget. Are you living a lean, uncomfortable life, but finding that you’re making plenty of cash on the side? Don’t be afraid to expand your budget just a little bit.
- Don’t budget for every single purchase. Sometimes you want smaller goals (like maybe getting a new phone?) – what you should do is set the cash aside in percentages every month for that new purchase, and buy it when you’re there.
- Reward yourself! It may sound contradictory but it is a good personal budgeting tip – a bit of positive reinforcement will make it easier for you to keep your budget reasonable in the future.