Budgeting and sticking to it can be very difficult. It’s hard to know where the money should go, and how much, and what, exactly, is the “right” amount to spend each month.
Luckily, there are a handful of ways that can make budgeting easier than you think. Here is some simple advice for setting aside some money for emergencies, or for larger goals, such as buying a home.
Know Your Actual Income And Expense
The first thing to do is to thoroughly document your income for each month. Many working in Alberta are fortunate to have their employer take care of their income taxes, retirement savings and health benefits for them on each paycheque, so this task should be relatively simple for those folks. For the many others who do not receive benefits or have an income tax or retirement savings programs at work, it is imperative to ensure you are putting enough money aside each month to cover these expenditures.
Look For The Low Hanging Fruit
Do you have a cappuccino every morning? It adds up. Small things like drinking the coffee supplied for free at your office and packing a lunch can make a big difference. Always pay for things with cash at hand only and leave your credit cards at home. Credit cards should be used in times of emergency only and paid off as quickly as possible.
And consider deeper savings. Do you really need 150 channels of television, or can you get by with half that number? Can you make changes in your habits to lower your auto, home, and life insurance premiums? Renting by yourself is costly, especially in Alberta’s major cities. Perhaps finding a roommate or moving to a less trendy address could be an option. Sometimes, the things you classify as “necessities” can be done without.
Saving money starts off with small steps, and as you get better at spending less than you make, those savings begin to snowball.
Don’t Go It Alone
Just like you can get group support for weight loss, or hire a personal trainer, you can get help for budgeting and not be ashamed of it. Join an online forum where budgeting is a topic, or talk to your bank about financial tools you may be able to access. If all else fails, hiring someone more fiscally savvy to set you on a sustainable budget beats feeling cash strapped every month.
Stay With It
There will be budgeting successes and upsets along the way. The time-honoured way to become good at almost anything is through practice. For instance, if you find that “miscellaneous expenses” has ballooned in your budget, you know that you weren’t being as honest with yourself as you could have been. That is not a sign to throw up your hands in frustration, but rather to re-examine the basics of your budget to see where you may be able to find more savings to make up for your overtures.
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