Knowing how to manage your money is something that's essential to enjoying a prosperous life. Without a budget in place, you won't have a savings set aside to cover unexpected expenses, clear set goals and a true understanding of your current status. Having a budget does not mean that you can't enjoy life, but rather quite the opposite. When you pay your bills on time you don't accumulate late fees which can add a substantial amount over the course of a single year. You also keep your name in good standing so that when the time comes that you need to borrow money, you won't have to contact your family, you can simply visit your local bank. Everyone's life is unique. Establishing and sticking to it will help you manage your money for the things you need, as well as the items you desire.
Where You Need to Spend Money
It's obvious that you need a roof over your head, electricity, gas, heat, and water. You also need food, bathing and cleaning products. Plus, you probably have a car loan and may need to take several medications daily. These are all expenses that you cannot avoid. That doesn't mean that you should pay more than you have to. You can get your prescriptions filled anywhere you want. It's best to shop around and check out places where they have the Walmart $4 prescription list of generic drugs. If you currently take several medications, this type of plan can offer huge annual savings.
Your flexible spending amount is a portion of your weekly or biweekly paycheck that you separate and keep to cover things like buying lunch for work, seeing a movie or dining out. The nice thing about having this money set aside is that it's yours to do as you please. Say, for instance, you have a wedding coming up you can set aside a portion of the money you keep for you a little at a time so that when the time comes you have the money in hand to cover the trip, as well as the gift. You can also use this money to plan your yearly vacation.
Covering Life's Unexpected Expenses
Having a budget in place with an allocated amount automatically set aside each paycheck for deposit into a savings account will help you stay on track. By having money tucked away for a rainy day, when an emergency arises such as a car or home repair, it won't affect your monthly obligations. You simply withdraw the money and continue to enjoy life. Without one in place, you end up scrambling around trying to find ways to come up with the needed funds. Unfortunately, most times the money comes from a promised payment like your mortgage or car loan, and then once that happens it's hard to catch up. You can start out with small deposits and once you free up more money contribute more.
Ways to Save Money
There are many ways to save money each month. If you find that once you establish a budget that it's impossible to cover all the expenses, you have two choices, you can either take on a part-time job temporarily or cut back on your expenses. The good news is that any budget has room for improvement. Besides the obvious measures like turning lights off and raising and lowering the heat, you can reduce your cable bill to basic service, use coupons when you shop and brown bag your lunch for work. If you find that despite your best efforts you still come up short, then you may have to take on a second job until you pay off some of your debt.
At some point throughout your life, you will need to have extra cash set aside for an emergency. Having a budget in place and sticking to it will ensure that when that time comes you won't have to alter your lifestyle.
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