Handling money is a life skill that everyone needs to learn. Cutting expenses to increase your savings is a part of it. It can be as huge as considering a foreclosure on your timeshare property or as simple as giving up that monthly magazine subscription.
Smart budgeting is another part of it. Here are some timeless tips to help you become a budgeting pro:
1. Create Your Financial Calendar
Missing a payment, even by a day, can have huge implications on your financial status. Especially if it’s your taxes. Creating an annual financial calendar can help you keep track of payments, receivables, and everything else in between. If you’re a business owner, keep separate accounts for your business and personal finances.
2. Be Mindful of Interest Rates
Whether it’s on your loans, savings accounts, or credit card debts, knowing what your interest rates are will help you focus on the finances that you need to prioritize.
3. Prioritize Debts and Savings
It’s smart to allocate at least 20% of our monthly income to your current debts, retirement fund, and savings account. Anything that needs a monthly contribution to help you save up for the future or to pay off existing loans should be on the top of your list once your salary comes in.
4. Shop Smart
There are many things you can do to practice this tip — buy in bulk, evaluate the cost per use, and buy only what you need. When you buy groceries, go with a list. This way, you won’t buy things on impulse and just purchase only what you have on the list.
5. Keep Your Savings in a Separate Account
Putting the amount of savings per month into a separate account will make it easier for you to keep track of how much you’ve saved and how much is left for your other expenses.
Pin these tips where you can easily access them and use them as your guide whenever you feel you’re starting to fall off the financial trail. Remember that smart and responsible adults know how to manage their finances. It’s never too late to be one of them.