This can be as basic or as detailed as you like but it is important that you make one. A budget lets you figure out exactly how much money you have to spend and how you are currently spending. When you know this, you can quickly identify where significant savings can be made. You will also have a rough figure in mind every time you make a purchase which will give you more determination to resist splashing the cash on unnecessary luxuries.
When you have a budget, you can see how much you have to play with. If you have room for savings, don’t give yourself the chance to blow them. Set up an automatic transfer to your savings account the day after payday. Make sure you don’t transfer too much because you don’t want to leave yourself with no money or having to reach into your savings to cover costs. This would defeat the purpose if you are constantly reaching into the cookie jar.
As with any form of borrowing, interest can be crippling and lead to a vicious cycle of mounting debt. Credit cards make borrowing almost instantaneous and in exchange, you are hit with a huge exchange rate. This almost doesn’t matter if you clear the balance on your credit card at the end of each month but if you don’t, you could find yourself not even making a dent in your debt. Amassing a large amount of credit card debt is the most common way for you to kiss your savings goodbye.
When it comes to food, using what you have at home can make a huge difference. The money you waste on drinking or eating out is completely wasted when it only costs a fraction and little forward thinking when prepared at home. A neat trick is to bring in your own instant coffee as opposed to buying it out at a coffee shop. Also, when preparing your meals, prepare in bulk and freeze. This will not only save you on cost but also preparation time so it won’t be as inconvenient.
Whether you are shopping for shoes or taking out insurance, comparing between multiple suppliers will ensure you never overpay again. It may not be as important with smaller more routine purchases but is certainly worth your time when it comes to the big stuff. Although, when it comes to insurance products, cheaper is not always better, it is better to focus on value for your money and make sure you are adequately covered.