Budgeting Tips for Beginners

Budgeting Tips for Beginners
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Budgeting Tips for Beginners

It can feel overwhelming to create your first ever budget, but here are some tips that you can follow to build your personal budget.budget

Know What You Have

The first thing that you will need to do is to determine how much you have. If you have a checking account, a savings account, an investment account and other such financial instruments you will need to find out how much you have in each account as well as the expenses and interest rate for each one. This is an important figure as it determines your net worth and the best use of your capital.

What Do You Make

Those that have a monthly salary that is fixed each month will find it easy to determine what they make. However, for those that are paid hourly or those that have an income that may rise and fall erratically it can be more difficult.

It is then important to determine the average monthly amount that you receive, regardless of how your monthly income is earned.

If you receive an irregular income then it is a good idea to work out the average based on the last 6 to 12 months. You can be extra conservative by taking the lowest monthly amount you have earned in the last year. This will give you a worst-case scenario.

What Do You Owe

The next step that you need to take is to determine your monthly debt payments that you make every month.

This should be straight forward as long as you have stopped taking on extra debt in the short term.

Determine your monthly debt payments and the total amount that you owe on each of these debts and the minimum monthly payment. This debt will include mortgages, car loan, credit card debt, student loans and other such debt. This will be your first few items in your budget and will help you to determine your net worth.

Your Net Worth

Once you have determined how much money you have and what you owe, you can calculate your net worth. You will need to subtract what you owe from what you have. The end sum of this calculation will tell you the value of your financial resources.

Average Recurring Monthly Expenses

You should make a pile of household expenses for a month. It is also a good idea to keep your receipts, your bills and other expense documents that arise in the month. These bills can then be divided into categories.

The categories that you make can be general or specific. This will help you to work out the average amount of expenses for each category.

Once you have added all this information into your budget, you will get to your bottom line. This number will tell you if you are overspending or not. This is also where you will find out if you are living within your means. You may discover though that you will have to make adjustments to your expenses so that you are able to live within your means.

Making Adjustments

If you find that you are overspending each month, then you will need to make cuts to your monthly expenses.

Once you have made your budget, made the necessary cuts and ensured you have evaluated categories and bills accurately, you will need to be disciplined. Ensure that you stay within your budget and are disciplined with your money.

How to Save on a Tight Budget

How to Save on a Tight Budget
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How to Save on a Tight Budget

If you are on a tight budget and want to start saving money or save more money then what you currently are then take a look at these tips.

tight budget
3riversfcu.org

Cut Spending Easily

You should keep a record of your expenditures for a month so that you are able to see where you are able to make small savings that add up. You might be surprised on how much you are spending on eating out or getting that daily coffee from your café.

With necessary purchases like food, you should comparison shop and find the lowest prices. Also when you go food shopping, make a list and stick to it, so you can avoid buying items you don’t actually need.

Limit the amount you spend on gifts. Rather get a few well-chosen gifts than a pile of gifts that are bought thoughtlessly because you didn’t know what to get.

Save for Emergencies

You should build an emergency fund so that you don’t have to rely on credit cards or loans to pay for an unexpected purchase. This is best done in a savings account. It is a good idea to ask your bank or credit union to automatically transfer money into your savings account, even if it is a small amount. Keep in mind that you will earn a little interest on whatever you manage to save.

If you have loose change then this should also go into your savings account. You will be surprised how much this can come to.

Reduce High Cost Debt

You need to avoid using payday loans and high interest credit cards. Payday loans usually come with an interest rate; meaning that you will be paying back a lot more than hat you borrowed paying off these high cost debts will easily save you money.

Save Free Money

If you get a tax refund then you should use some of this to pay off your debts and the other half should saved.

Also any unexpected money that you receive should also be used in the same way whether it is an inheritance, an investment that has paid off or other such things.

Boost your Salary without Getting a Raise

Boost your Salary without Getting a Raise
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Boost your Salary without Getting a Raise

Your employer will have extra perks and employee benefits that are available to employees that want them, but many will not take advantage of these, thinking that they are too complicated or not sure how they can take advantage of these. However, when you add these benefits up they are able to raise your salary.

salary
nerdwallet.com

Lets take a look at popular employee benefit programs that employers offer.

Commuter Benefits

There are employers that will offer commuter benefits so that the cost of getting to and from work is cut. Employers will either pay you a tax-free subsidy each month directly to you or they will take the benefit off your salary. You can actually save money by taking this benefit, as it is a pre-tax deduction.

Insurances

Taxes and retirement contributions are deducted from your paycheck as well as other premiums for other insurances that you have signed up for like medical. However, you may find that you do not need all the added protection especially if you are healthy.

You should then review all of the insurance plans that you are paying for and adjust or eliminate as needed.

Stock Options

There are employers that allow workers to invest in their business through stock options, which can be a clever way to boost your income. Stock options allow you to buy a certain number of company shares at a set price, which is usually lower than the current value. The hope here is that the value of the company’s stock increase over time so when you are ready to sell you will get a good windfall.

Expense Reimbursement

You should ensure that you personally are not paying job-related expenses. Whilst on business, your employer will reimburse you for travel and meals.

Vacation Pay

There are employers that will pay employees for vacation time that they don’t use.

Fitness and Wellness Programs

There are many employers that see the value in ensuring that employees stay mentally and physically fit. They may pay for your gym membership or part of it. They might hold fitness training sessions like yoga, Pilates or CrossFit in office.

Freebies and Employee Discounts

There are a lot of employers that will give free or discounted versions of their products or services that they sell. They may even giveaway tickets for the movies or sport games, free subscriptions to magazines or Netflix.

Other freebies might include cleaning house services, babysitting or gadgets.

You can save a little and get some extra cash. You should find out about all the benefits that your employer offers as they are worth your time.

Fast Cash 2015 Budget plan

Fast Cash 2015 Budget plan
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the Halaal Piggy BankMan holding piggy bank. Shallow DOF

excuse the irony..
Your savings and position should be transparent

Ensure you do not under budget. A month usually has 30 days. In that time there will be expected costs

example: you expect to buy takeaways. Infact you “expect” to purchase takeaways 5 times and maybe you have allocated money for that.


Just know, you may infact end up spending more on those 5 occasions if prices go up or you have more company.

The Unexpected should be expect, and when it doesn’t happen, your concern for damage limitation to your budget will only benefit you the next month


Remember with a Budget, we aim to make the future easier.

At the same time accounts we pay off is geared to make the future easier. All because in the past you wanted something for the present, which will only be paid up in future. A smartphone for example.


How to get blacklisted?

This means the product is worth x. You get it and pay over 2 years and end up paying more than you should. This is all well and good as yes its a gamble. You accept something now, as its advance is worth paying for. But as soon as we welcoming many “higher purchase” transactions (i take now and pay later), eventually the interest accumulated and the term of the payments may consume all your spare cash and often result in how people get blacklisted