The idea of putting aside a portion of the paycheck in order to save for the inevitable rainy days is quite compelling but given the ever-increasing prices of commodities especially during these tough economic times, budgeting has been more like an uphill climb for most of us.
Nevertheless, no matter how small a person’s monthly paycheck is, it’s still essential to spend within the threshold of it and not overspend that may just result in huge debts.
The magnitude of living below one’s means is very much appreciated and should be introduce or reintroduce to all of us. It’s the manner of living or perhaps lifestyle that is focused upon saving and delaying gratification in an effort to be more financially stable.
Hence, the following are some surefire tips on how to budget and make one’s money last until payday.
Estimating Monthly Income
The first thing that should be given consideration is estimating the amount of money that will flow on a monthly basis. It includes one’s basic paycheck plus some other forms of alternative income like part-time earnings, residual royalties and other forms of recurring revenues. The overall amount is the total monthly income to which one will work with.
Automatic Savings Plan
This may sound a bit harsh but the reality is people have the instinct to spend money they have in their hands. Thus, it’s quite important to discipline one’s self to allot a certain portion of the income automatically once it is received. Savings deposit should be created to prepare for such emergency expenses not reflected in the budget.
Identify the Fixed and Variable Expenses
There are two kinds of expense, the fixed and the variables. More so, fixed are expenses which cannot be further altered or minimized such expenses include transportation expenses, rent, mortgages and car payments. Conversely, variable expenses are the exact opposite of fixed.
While it’s extremely difficult to change spending habits, variable expenses should be minimized. Furthermore, it’s important to be meticulous in buying items and must weigh every option. Food items significantly differ in price while posing the same nutritional value. Moreover, it’s smarter to bring bottled water than buy a 250 ML bottle for the price of a gallon of tap water – they are no different from each other.
Motivation and Discipline
It’s easy to make a budget but it’s hard to stick to it. However, there are lots of ways that can motivate a person into walking the talk. People can reward themselves perhaps a basketball game or an ice cream. Those simple things will fuel a person’s desire to stick with the budget. More than the value of the reward itself, somehow the reward has an intrinsic value – a sort of accomplishment.
More so, another good technique is to create motivational tools that will remind one’s self of such budgeting goal. A computer or cell phone wallpaper or a sheet of paper in the refrigerator can remind a person that he/she should stick to the budget at hand.