![]() Thanks to the birth of credit cards, a lot of people have been spending more than what they can actually afford. That is about $936 billion dollars in outstanding revolving debt. You can do this.Īccording to statistics, the average credit card debt per household is about $15,779 in December of last year. ![]() Long-term goals may be difficult to reach at times, especially when they cost so much and are pretty much more than your actual life savings however, reminding yourself that you are saving for something that you actually want is a good form of motivation. Other than helping you to achieve your dreams, having a target goal – especially big and long-term ones – can help you see where your money is going instead of you wondering where all your money went. Focus on the prize instead of spending every single shilling you have on nonsense stuff. Your goal could be to buy a new car or to spend a month’s vacation in Bali, or even to just buy that new TV you’ve been eyeing for months now. ![]() Budgeting enables you to have a long-term goal and to focus on working toward that goal. If you’re still not convinced, here are some plausible reasons as to why you need a budget asap and why you need to stick to it:Ī budget helps you to keep your eye on the prize. In this tough economy where job retrenches are common and wallets are tight, creating a budget plan is the first step to help you save yourself from a ton of debt and unplanned, impulsive expenses. Although deep down we know how important a budget plan is, many of us have been guilty of mentally scolding ourselves time and time again for failing to come up with one and end up regretting the time and money that we wasted. However, if covering your essential costs alone already gives you a negative amount, then look into your list again and see where you can cut back.Budgeting can be a challenging feat. If you still have extra money left after adding up both essential and non-essential expenses, then you can use that extra money to add into your savings. If you still have extra, see if it is able to cover for the expenses listed in your extra expenses. ![]() Take the Total Amount of the Cost for Essentials from your Incomeĭeduct the total amount of essential expenses from your total income. Get the separate total for your extras and a separate total for your essentials. Look through your list of extra expenses and mark those that you do not immediately need to purchase or pay immediately.Īdd Up the Total Amount for Both CategoriesĪdd up the total cost of expenses for both extra and essential expenses. One category should be the expenses that are important or the items that are essentially needed, while the other one contains extra expenses or items that you do not necessarily need unless you have extra cash for it. Organize your expenses by putting them into categories. Tracking your receipts from previous purchases will help you make an average computation of the money you put out each month and figure out which item costs too much and if you can cut back on it. Download How to Make an Effective Budget Planīy using our Budget Forms or Sample Budget Forms, you can easily keep track of the amount of money that you earn or the amount of money that comes in and the amount that you spend every month.
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