01/30/2020
For many of us, it’s easy to lose track of our personal budgets. Unexpected payments often crop up, meaning our savings plans soon fall behind. If your budget isn’t going quite as well as you’d hoped, there are a few ways you can get it back on track.
Work out what you’re spending money on
Before setting a reasonable budget for yourself, first look at your monthly outgoings. To start, pull up your most recent bank statements, pay slips, card statements, bills and receipts. Added together, this will outline how much you spend on everything - on average - each month.
The main outgoings you should look out for are:
- Household bills such as gas, electric and water.
- Monthly rent or mortgage payments.
- Home, car and life insurance.
- Living costs – including groceries, toiletries, clothing and other necessities.
- Regular travel costs – such as car repairs, gas or public transport.
When you investigate your monthly outgoings in more detail, you’ll get a clearer idea of what you can afford. It will also show you where you can cut back, making you less likely to end up in debt.
Review your existing budget
Your existing budget may not be the right one for you. If the amount you spend each month is more than what you’re earning, it’s not a budget that’s working. Similarly, if you want to save for a vacation or buy a new car, you’ll need to see how you can control your spending habits to afford either of them. This way, you can create a budget so you have enough left over to put aside for future purchases.
As you can’t always guarantee a salary increase, it may be worth changing your spending habits. You may want to consider moving into a property with lower rent or mortgage costs, or something as simple as investing in a cheaper phone. You’re often restricted to what utility services you can get – depending on where you live – but make sure you’re on the best tariff for you.
Set short-term financial goals
When setting your financial plan and establishing a budget, you need to think about your short-term goals alongside any long-term ones. Short-term goals generally focus on saving for something in the near future that doesn’t come at a great cost. This could be anything from a new couch for your living room to fixing things around your home.
Generally, a short-term goal will be one you plan to achieve within a two-year timeframe. Once you identify what your goals are, it’s important to prioritize the most important ones. This way you can feasibly set a deadline for when you want to reach each goal, knowing how much money to put aside every month.
Switch to cash or Prepaid Cards
Switching to cash or a Prepaid Card to buy things can stop you from spending more than your budget allows. If you’re budgeting a shopping trip but take your regular credit or debit card with you, it’s easy to give into temptation and spend more than planned.
Even though a Prepaid Card works just like your standard debit or credit card, you choose the amount you wish to add to your card. This way, you can’t go over your budget with excessive spending. Some Prepaid Cards do come with an overdraft, but to ensure you stick to a limit it’s better to avoid them. Options such as the Kroger Reloadable Prepaid Debit Card help you only spend what you can afford.
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