budgeting

By Mack Bekeza

Budgeting sounds difficult, right? Well actually, not really. In fact, it is even more difficult not to maintain a budget. Many people think they don’t need a budget, but end up broke by the time their next paycheck comes in. This can lead to a never ending cycle of not having any money left over and not being able to accomplish financial security, which is never fun!

Budgeting is very important to not only maintain financial security at the homestead, but it can be a very powerful tool to help reach your goals like saving for a house, retirement, and even a nice vacation every now and then. If you are curious on how to get started, check out these tips.

1. When starting your budget, it is important to pay yourself first! In other words, make sure the first thing you do when you get paid is to deposit a small amount into your savings. This can be used to fund a rainy day fund, a home improvement project, contribute to your retirement accounts, or preferably, a combination of those.
2. Once you have “paid yourself”, budget towards the expenses that don’t vary like rent, insurance, utilities, etc.
3. Next (and here comes the part that can help you big time), it is time to budget for things that are more discretionary like groceries, eating out, clothes, subscriptions, and much more. Easy targets for this include eating out and shopping. Typically, these two things are what people spend way too much on and end up not being able to pay some important bills or even save. Before setting goals for this part, make sure that you are able to figure up how much you spend on these items by looking through bank statements. This will help give you a clear view on what you can cut back on. For instance, if you figure out that you spend an average of $500 a month eating out and only $200 on groceries, set a goal to cut back on eating out and spend a little more on groceries. This alone can save you hundreds of dollars a month, which can go towards your savings goals!

Now that you have a basic idea of how to budget, are there any tools that can help you? Yes! There are plenty of free or low cost budgeting tools that can help you accomplish this rather quickly. For instance, Mint.com is an excellent and free way to track and manage your expenses. Another one includes YNAB.com, a.k.a you need a budget. For as little as $5 a month, you can have access to an exceptional budgeting tool that allows you to have access to a user friendly mobile app as well.

Hopefully you take these tips to get your finances together and accomplish big goals… now get to budgeting! Also don’t forget to follow us @Save4Youself to get more tips for your finances!

© Castle Rock Investment Company. All rights reserved. Please share your insights with us at mack@castlerockinvesting.com or via phone at 303-719-7523