I have learned that having a budget is crucial for saving money. It enables you to manage your money better, it gives you visibility where your money is going, and it highlights areas where you could save more.
To create a budget:
- Get out all your bills from the last month.
- Start making a list and recording all your bills. A sample list you may want to track could look something like:
- Home Repairs
- Home Owners Insurance
- Phone (cell/land line)
- Car Payment(s)
- Gas, Oil changes
Insurance (Health, Life, Disability)
Other (Child Care, Christmas Gifts, Birthday Gifts)
Vacation Savings (If I am saving for something like new furniture, or a vacation, it gets it's own category)
- If you are within your budget, congratulations! Now you should start adjusting to determine where you can save.
- If you are spending more than you make, then look for areas of spending that you should cut back on or eliminate (i.e. Do you need both a land line and a cell phone?, Could you eat out less?).