When you leave home for the first time, there’s a temptation to splurge a little. Suddenly there’s no-one to keep tabs on you or to notice what time you got home last night. You can eat whatever you like, and you can go out every night. This is all fine of course, but it may cause you problems in the long run.
If you haven’t moved out yet, then take a look at these studio apartments for rent. If possible, create your budget before you leave home. This will allow you to work out all your likely expenses in advance. Try to come up with a sensible budget that allows you to cover your bills, save and socialize. Follow these simple steps to creating a realistic plan. Budgeting needn't be dull. Read our tips for making it fun.
A household budget is a plan that takes into account the money you have coming in and the money going out. Putting a plan in place will help you avoid spending more than you can afford.
Gather together your recent bank statements. A few months worth should be fine. Gather your recent payslips and any bills you have. Include all incoming money and outgoing expenses. Decide whether you’re going to use a spreadsheet to calculate your budget or a notebook.
Money Coming In
First work out the money you have coming in each month after taxes. If you’re self-employed or your earnings change, first work out your take-home page for the year. Divide this by twelve to work out the monthly amount.
Money Going Out
Next work out your outgoings. Look through your bank statements and bills and make a list. Make sure you don’t miss anything. Don’t forget to include your food bills. A spreadsheet is useful here as it will add figures for you. If you’re working on paper, then use a calculator.
What is Left?
Take your monthly outgoings from your income and work out what you have left each month. From this remaining amount put money aside for unexpected bills. Allocate a percentage to save, if you haven’t done so already. Work out any additional expenses such as birthday presents. The money that is remaining can be used for entertainment and socializing.
When creating your budget be as realistic as possible. Having a list of all your income and expenses will allow you to make changes. Work out if there are any areas you can cut back. For example, by taking a packed lunch to work rather than eating out. Or by making your own coffee in the morning and using a travel mug. If this seems like a step too far, then consider doing this every other day. Small tweaks here and there can mount up over the year.
Look for savings that you will hardly notice. Such as, changing your fuel supplier or bank account. You won’t notice the difference, but the savings will mount up. For further advice on managing your money read this article.
Try not to view budgeting as a chore. Rather, view it as something you do to enhance your life and make it better. You will be much happier knowing that you’re living within your means. And living smarter will allow you to spend more on the things you enjoy.