Saving money and budgeting usually go hand in hand. Both are often difficult for even the most disciplined of people. However, setting up some guidelines can help make the process easier.
A good rule of thumb is to use only half of your paycheck for necessities. These essentials may vary by household, but some common items to include are:
- Property taxes
- Child-care expenses
- Debt repayment
- Health care
In addition to the 50 % for essentials, another 20% “bucket” can be slated for savings. The 15% portion is for retirement savings and the 5% is for emergency savings. This still leaves you with 30% of your income for spending and other uses.
Quick Ways to Save
Sometimes you just need a little bit of time to think through purchases or need to slash a few unnecessary expenses to get your budget back on track:
Sleep on it – Delay nonessential purchases for at least 24 hours. This helps you avoid impulse purchases. If you still really want it the next day, you can purchase the item then.
Consider the true cost – Rather than looking at how much money something represents, consider how many hours you had to work to make that purchase.
Make it automatic – Set up automatic savings so that you never miss the money.
Take a break – Have at least one day a week when you make no purchases.
Switch to water – Swap water for expensive coffee or other beverages.
Try these easy methods and see how they help make “ends meet”.