Did you know that tightening your budget could help you become a homeowner earlier than you might imagine? You could also use the extra money you save to buy a new car, pay for your education, or take a much-needed vacation. If this sounds appealing to you, use the following tips to create a budget.
- Evaluate Your Current Spending
Collect statements for your credit card, savings account, and checking account to examine your current spending habits. Then, make a list of necessary spending and frivolous spending. For example, utility bills and mortgage payments are obviously necessities, while eating at a nice restaurant and movie rentals are luxuries. Be sure to be as specific as possible when making your list so you know what needs to be cut out.
- Eliminate Unnecessary Spending
Look for ways to create more accessible money in your budget. If you buy coffee before work instead of making it at home, then you’re spending roughly $3 more than is necessary, which adds up to between $15 and $21 a week. Expenditures on cable, coffee, manicures, alcohol, movies, and fast food are not necessities, so cut them out.
Budgeting properly requires sacrifices in spending, so build incentives into your new budget that make budgeting fun. Consider rewarding yourself with an inexpensive expenditure once a week.
The general rule of thumb is to save 10 percent of your paycheck. For some, this is difficult and for others this is too easy. Therefore, determine what you can afford to save after eliminating unnecessary spending, but remember to be realistic. When the season changes, your electricity bill could spike, so allow for some wiggle room in your budget.
If you need more help getting your spending on track, consult a member service representative at GCS Federal Credit Union. We can help you consolidate your debt, create a more realistic budget, and start saving more of what you earn. To enlist our help today, call (618) 797-7993.