Living
on a tight budget can be straining. Setting financial goals and creating a
budget are great starting points to making things work on a tight budget, but
just as important is developing healthy and smart financial habits.
Overspending often adds more stress to your life; the key is to live below your
means to give yourself more financial freedom. You can do a variety of things
to live on a tight budget.
Create a Budget
- Creating a budget is not always the easiest thing
to do, but it is an important step to keep finances in order. Provide as
much detailed information as possible on the budget sheet in order to see
where money is coming from and where it is going. Include all bank and
investment statements, recent bills, and income statements, as well as any
other paper containing income or expense information. If some numbers vary
each month, use a monthly average. Keep records of income and bills. Break
the expenses into two categories, fixed and variable, to give a clear idea
of what is an essential expense, like mortgage, rent, car payments, bills
and credit cards, and what will vary monthly, like groceries, eating out
and entertainment. Your goal is to get the budget sheet to have more
income than expenses. This will most likely take some budget adjustments
over a few months/ years. If you have a surplus, you can put that money
towards a down payment on a property.
Food
- Food is an essential part of life, bit it is
often one of the first things people cut back on when having a tight
budget. The key to smart food budget management is smart shopping. Coupons
and sales are a great start to minimizing the budget, but do not waste
food, either. Plan the menu and make the grocery list according to your
weekly menu. Also, properly handle the food by freezing it or consuming it
before it goes bad. Buying in bulk can also save a lot and mean fewer
trips to the store.
Habits
- Developing healthy and smart financial habits is
the key to making things work on a tight budget. Pay bills on time. Meeting
deadlines will not only prevent service interruptions, it will also save
money on late fees. Set up a standing order at the bank or pay bills
online automatically to ensure bills are paid on time. For other expenses,
set up an "envelope system" that will help keep you from
overspending on various expenses each month or pay period. An envelope
system is when you designate a letter envelope monthly expenses, like
groceries or entertainment, and put a set amount of cash for each category
into the envelopes. When the money is gone for a particular category, you
have to wait until the next paycheck to replenish and spend in that
category. That way, you spend only what your budget allows for in that
category.
Basic Money Saving Tips
- Stop spending on fancy coffees, expensive
lunches, smoking and drinking, entertainment, and all other items or
services that are not a necessity. This might mean canceling the cable,
cutting back on cellphone features, take your own drinks and chairs to the
beach, and stop smoking. Instead borrow movies from friends, rent books
from the library, and pack a lunch every day.
This article is presented to you by Miriam Engeln, working in sales at Century 21 Aruba, tel: (297) 5864242. For real estate inquiries please call or email: miriam@arubahouses.com
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