Life can get pretty expensive. You have to pay rent or a mortgage, car payments, utilities, groceries and so much more. In January 2019 Forbes Magazine reported that 78% of U.S. workers live from paycheck to paycheck. How can you turn this around and get better control of your finances?One way is to make more money—but this is easier said than done. Another solution is to live on a budget. Here’s how:
Now that you have a budget template, how do you use it? Line by line, enter how much you expect to spend on various bills and other items as well as how much you actually spend. Think of the first as the budget, and the second as the reality. If the reality is as much as or lower than the budget, then you’re doing well. If it’s more than the budget, you’re overspending.
Once you’ve created the budget, subtract your expenses from your take-home pay, and see how much you have left. Obviously, if the number is negative, you’ll need to cut back your expenses some, but for now, let’s suppose it’s higher. Subtract $50 or $100 from it as a buffer, and the rest is how much you have available to save every month.
When you get paid, put that amount in savings right away. Don’t even let it tempt you to spend it. If you take the attitude that you’ll see how much you have at the end of the month and save that, you’re likely to spend it. Save it up front, and you’re more likely not to touch it.
The first few months of living on a budget has to include some serious expense tracking. It’s easy to predict how much you’ll spend on bills, but it can be tough to accurately estimate how much you spend on things like clothing, food, and fun.
Keep your receipts from these expenses, and enter them on your spreadsheet.
You’re also ready to figure out where you can spend less. Do you have a streaming service that you never watch? Consider cutting it. Is your dresser overflowing with clothes, yet you keep buying more? Clear the clutter, decide what clothes you really want to wear, and buy fewer.Once you start saving up front and watching your spending, you’ll be surprised how far your money can go. Then, when you do get a raise or a higher paying job, you’ll be able to save even more toward the future.