The Smartest Ways to Budget Your Money

A guest post by Elijah Wells-Collin of cheapinsurance123.com

You can’thope to stay on top of your finances without creating and sticking to a budget.
If you are unsure about how to proceed with budgeting your money, you’re not
alone; many people are utterly lost when it comes to managing their finances.
You shouldn’t give up, though. By keeping the following tips in mind, you can
successfully budget your money and enjoy greater financial freedom. You can do
these by doing  things like: Tracking and analysing your spending, taking  income
into account, adjusting spending, use of cash, and shopping for cheap insurance.

Track Your Spending

In order to make sense of your financial situation, you need to record it
thoroughly. For best results, you should plan on tracking your spending for at
least one month. Don’t let anything slip through the cracks. Whether you pay
your monthly car loan bill or purchase a cappuccino, you should record the
transaction. Doing this will allow you to see where your money is really going.

Analyse Your Spending

After tracking your spending for a while, you need to analyse it. A great way
to get started with that is by divvying things up into two categories:
discretionary and non-discretionary spending. Discretionary spending refers to
unessential things like dining out, entertainment and the like;
non-discretionary refers to high-priority things like food and shelter. When
this is done, you will be able to see the nature of your spending.

Take Your Income into Account

Most people are well aware of what they earn in any given month. To keep your budget on track,
though, you need to account for every last penny. If you do odd jobs or work on
the side, make sure to include that income too.

Adjust Your Spending

Take a look at your non-discretionary spending and your total income. Are you
coming up short? If so, you may have trouble paying for essentials like health
insurance, rent and groceries. One option is to cut back on your discretionary
spending. If you cut it way back and still can’t afford to make a cheap
insurance payment or pay another essential bill, you will have to come up with
ways to increase your income.

Use Cash

Debit cards pose major issues for many people. When you are out and about, it
is all too easy to whip out a debit card to make some random purchase. To keep
that from happening, you should leave the debit card at home. When going out,
bring along a small amount of cash. This will limit the amount that you spend
and make you think harder about making random purchases

Shop for Cheap Insurance

Another smart move is to sit down and look at your insurance bills. Are you
getting fair prices? Collect quotes for life insurance, and for  car insurance and home
and contents. If you find a better deal, take it. Having coverage is very
important – it falls into the non-discretionary column on your budget – but you
shouldn’t be paying too much for it.

There is no simple way to keep your budget on track. Each person’s financial
situation is unique, which is why budgeting money requires hard work. By
keeping these tips and tricks in mind, though, you can increase your odds of
achieving financial freedom. Sticking to a budget and being careful with your
money will reduce stress and make for a happier, healthier life.

This post is sponsored

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1 Comment

  1. Lorraine from The Party Times
    July 17, 2011 / 8:27 pm

    what a great, sensible post – I must take note!

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