Finances can be hard stuff, and when push comes to shove it can be easy for things to spiral all too quickly out of control. Wondering where all your money goes during the month is a question that many people have. A budget helps when you’re managing your savings, expenses and income. Having a spending plan makes sure that you spend your money on your necessities, but that you’ll still have money to use for other more fun things. By being careful and watching what you’re doing with your money, you can work on getting out of debt. Some more information about that very idea can be seen here.
I’ve had to spend the last few years trying to get my finances back in order after having some financial struggles. So trying to work on a spending plan has been helpful in getting things situated. I’ve managed to pull my credit score up significantly, have money to be able to afford holidays and birthdays without as much stress, and be able to get things I’ve wanted here and there. All while keeping everything else paid that needs paid.
A spending plan will have you look at things you have to have money fore, and things you wish you could have money for. Wants are things like extra clothes, that newest video game, craft supplies, pretty new bedding when your items are just fine. Needs are things like your bills, household items that need replenished, food, and the like.
By working out a budget and a spending plan, you can work on getting out of debt like I have. There are many ways you can work on building a budget and making a spending plan. I usually have both an excel document to look at my current balances, and monthly payments, so I can see how much at minimum I need each month. From there, I also have to factor in weekly household expenses, and add an extra $50-100 per week for fun things or additional things that might pop up. Since I’m self employed it’s up to me to make up what I need, and the money for extra. I also try and roll off my debt by making bigger than minimum payments on things, and once one thing is paid off, apply some of that payment amount towards other debts to get them gone quicker.
If you start with how much money is coming in a month, and list what you need to spend, you’re on your way to making your own spending plan.
Be sure to remember to include things like savings, rent, bills, food, gas/car maintenance, and miscellaneous things like toilet paper, pet food, etc.
You’ll then want a list of wish/wants. Video games, fast food, movies, toys, and things like that.
You’ll want to keep track of how much you’re actually spending each week, so then you can see if you are making enough money or if you either need to make more, or spend less on your wants/needs. It’s okay to need to or want to do both things, more so if you’re working on getting out of debt.
I know how tempting it can be to just spend money and not worry about having money for a rainy day. I used to do the same. These past couple of years I’ve really been more careful and having a spending plan meant that I could do repairs on both cars, and manage $2,100 in vet bills between two of the cats this year. Before, I wouldn’t have been able to do any of that, so I am glad that I’ve worked to have a budget and spending plan to get us on the right track financially.
Do you keep track of your finances with a budget and/or spending plan? I would love to hear what tips and tricks you use to keep your finances in check.
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