if you are scrambling for cash at the end of every month, regardless of how much you make, you may have a problem with your spending habits. We are all guilty of overspending at some point. It happens for lots of reasons. You may really need something, and then you go and buy the most expensive version of it, even though you won't make full use of its benefits, On the other hand, some people spend because they didn't have much before, because they are bored, or because it's their way of comforting themselves.
But, according to Jane Lawson, who is the financial director for Essayontime, there are several ways you can put an end to your overspending habits, and even save some money at the end of every month. Here are five things you can do to keep your personal budget under control.
1. Start Keeping Track of How Much You Spend
First, you need to establish exactly how much money you are earning every month. If you only have one source of income, you're all set, but if your income depends on several sources, such as bonuses, tips, stocks, bonds, or wages, you will need to add them all up. Then add up all of your fixed costs, such as your rent, utility bills (they can be considered fixed, because they don't vary much), credit card bills, and mortgage. You can use Excel for this, or one of the several dozen budgeting apps out there. After that, you will be able to figure how much you can spend during one month.
2. Start Paying in Cash
The reason why lots of people prefer to use their credit card is because of the convenience. The trouble is that most of us are more prone to spending if you use our credit cards. The solution would be to withdraw all of your funds and divide all the cash into several envelopes. In one envelope, set aside the cash for your fixed expenses. In the other, put all of the money you're going to be spending next week. And, of course, if possible, you should also have an envelope for your savings.
3. Find More Affordable Ways to Spend Your Free Time
Being on a budget doesn't mean sacrificing your own personal life. Instead of going to an expensive dinner with your friends, meet for drinks. Instead of spending money on Netflix, Amazon Prime, or movie tickets, you can get a book from your local library or your own library at home, which can be even more entertaining. Instead of going on a long vacation you’re your significant other, you can spend a day in nature and go on a picnic.
4. Make Short-Term Financial Milestones
You should focus on smaller financial goals in the beginning, because they are more attainable. For instance, you can set aside 10% of your salary every month. If you know your way around the kitchen, you can start cooking at home, and bringing lunch to work every day, instead of eating out or ordering in. Also, try going one month without spending money on clothes. These goals work, not just because they reasonable, but because they aren't overly restrictive.
5. Treat Yourself
If you are constantly saving money and stopping yourself from spending on anything but the most basic needs, you will end up with a sizable sum at the end of every month. But, you are also risking going on a shopping spree and spending all of that extra money, and winding up right back where you have started. To prevent that from happening, reward yourself with a nice dinner once a month, buy an item of clothing, or go on a vacation by taking advantage of last-minute offers.
While you cannot account for every single expense that is bound to come your way in the future, you can make the best of your budget regarding the costs you are familiar with. Using these tips, you will be able to develop better spending habits, and hopefully, save some money on the side, just in case.