How Budgeting Can Lead to Better Weekends
It’s easier to save money and have the flexibility to spend on things that are important to you than most people realize. Budgeting is the first step to experiencing the freedom and confidence that come with knowing you’re financially prepared. Then, staying on track and allocating for the things that matter most to you, helps you and your family have better weekends and enjoy life more without the added stress that typically surrounds money matters.
Budgeting helps you tackle and understand money management because it offers a clear picture of income and debt and current spending and saving habits. To get started, begin with is how much money is coming in and how much money is going out.
While many people avoid taking a deep dive into their spending habits, it’s the only way to get a comprehensive view of where your money goes and start taking control. Once you do this, you’re ready to begin making choices and changes, so you can start saving or allocating for things that are important to you like starting a college fund, paying off debt sooner, or saving for retirement.
Spending at a Glance
Once you’ve listed your net monthly income (remember “net” is the amount that lands in your bank account, after things like taxes and insurance have been taken out), it’s time to start looking at those receipts, bank statements, or electronic wallet notifications. If this is your first time looking at this, you might be surprised at how much money you spend at the coffee shop, on pizza delivery, or dining out each month.
Most of us have regular expenses each month, such as rent, a car payment, and insurance. These are the simple ones and shouldn’t change unless you’ve made a mistake or two and gotten stuck with a late payment. You’re not alone in that, and budgeting can help you keep track, pay on time, and keep those late fees at bay.
The fixed bills are easy to list, but others will change each month like a water bill, an unexpected trip to the doctor’s office, car maintenance, and what you spend on groceries. One way to account for the fluctuation, for example, in an electric bill, is to gather the last three month’s statements and calculate the average of the three bills. In doing so, keep in mind that heating and cooling charges tend to spike during the middle of the summer and the dead of winter, especially if you live in an area where your seasons are more extreme. Check with your utility company because many of them offer installment plans, so you can avoid having a surprise bill after a harsh winter or sweltering summer.
Calculating other expenses like eating out or buying groceries, purchasing household items, such as cleaning supplies, filling up your fuel tank, and going to the salon or barber shop, can be done using the same tactic of going through a few months’ worth of bank statements to see when, where, and how much money is spent on these areas. Then, you can easily track spending for those items and get an average number to pop into that spreadsheet or app.
There are many positive aspects of tracking what you earn and what you spend, but the overarching goal is to make sure you don’t spend more than you make each month and, what you save and spend aligns with your financial goals and values. When you’re in control of your finances and your spending habits, you’re able to make sure that every dollar is going to something that’s important to you and helps you reach your financial goals.
When you have a clear plan that includes the ability to splurge on the things that are important to you, then enjoying the weekends is easy. So, whether it’s a day at the spa, tickets to a concert, a home improvement project, or a weekend get-away, when you create and stick to a monthly plan, you can relax and enjoy, because it was in the budget!
At LendingPoint, we believe everyone deserves to experience the power of possibilities and a budget that achieves your financial goals.
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