If you’ve found that there seems to be a lot of week left at the end of the money, then you might be thinking about making a budget so you can see where the money is going, and how to make it last longer. An important thing to remember when making your budget is to be realistic about it so that it is as effective and useful as it can be. Here are 5 tips to help you create a realistic budget that will help you make your money go further.
1. Have a Goal
One way to help you with budgeting is to have a goal, as in, a reason to be budgeting. If you have an end goal in mind then it will help you to stay focussed with your budget and stick to it. It might be a holiday, saving up for a house deposit or a new purchase, or maybe you just want to have a certain amount of money saved by a certain amount of time. It’s up to you what the goal is, but choose one, and stick to it. It will help you immensely with your budget. If you are looking to buy a house then it is good to be mindful that you are likely to be rewarded with some home loans for having savings to start you off.
2. Know Exactly How Much is Coming in
If you work for yourself, or have money coming in dribs and drabs then you will want to be clear about how much is coming in, and when it all comes in, to help you budget effectively. Work out exactly how much money is coming in, and when you can expect it to be there so that you can work your budget around it.
3. Be Realistic About Spending
Being realistic about spending is imperative to planning a good budget and sticking to it. If you make a budget that only has a less than realistic amount of money factored to bills and food then it’s likely that you are going to have to be robbing Paul to pay Peter. Be realistic about what money you are going to need to spend so that you are going to have a realistic figure of how much money you have left after bills and incidentals.
4. Make Realistic Cutbacks
Be realistic about the amount of money that you can shave off particular things. For example, if you currently spend $300 a week on food then don’t cut it back to $100 as this is not going to be a realistic figure. It is better to opt for cutting back a smaller amount that you can manage and actually stick to your budget, than cutting back a ridiculous amount and never being able to do it properly!
5. Go Old School
With the new technologies of using your plastic card to make purchases often you are unsure about how much money you are actually spending, and how much you can save. One way to be clear about your budget and have realistic goals is to go old school with money. Work in cash, rather than electronic spending habits, this way you know exactly how much money you have to spend, and will find it easier to stick to your budget.