Finance

How to Create a Budget and Start Saving Money

*this is a guest post

When you’re trying to support a family and save money at the same time, setting up a budget is a crucial step to success. Keeping track of where your money goes each month will give you a better idea of where you can reduce your spending and save more. Use an online calculator to track spending habits, determine allotments, and compute budget totals. By following a few simple steps and consulting professionals, such as a Belmont insurance agent, you can create a customized budget and be on your way to financial security in no time.

6870878979_159c7e6104_zStep 1: Gather Information

Before you begin, you’ll need to have your records in order to create a realistic and accurate budget. Gather all past statements and receipts, including credit card statements and other bills. Once you have all of the information, separate records into categories, such as food, clothing, child care, auto expenses, and other types of expenditures. You’ll also have several bills that are fixed each month, such as your mortgage, cell phone bill, car payment, and various insurances. If you have trouble finding a particular bill, contact a representative, such as a Belmont insurance agent, to obtain the correct figures.

Step 2: Input Figures

Now you have the option of determining how you want to track your spending. You can either use an online calculator, a free budgeting service, or the old-fashioned method of a paper ledger. Once you have compiled all the data, you’ll be able to see how much you’ve been spending in each category and, once you have computed all subtotals, you’re ready to determine if any areas can be adjusted.

Step 3: Reduce Spending

Getting a raise or a second job can increase your income, but reducing your spending is the quickest way to increase the total in your bank account. List all the variable categories, such as food, gas, and clothes, in one section and begin determining ways to cut back. There are simple ways to cut bills such as eating out, utilities, and shopping:

  • Purchase a discount membership to save on restaurant bills

 

  • Set a limit on the amount you can spend while shopping

 

  • Use cash

 

 

Step 4: Decrease Bills

In addition to saving in flexible areas that vary each month, you can also reduce fixed costs by contacting providers and researching options.  Contact your cell phone provider to discuss plan options, consider refinancing your mortgage and car loans, contact a professional, such as a Belmont insurance agent, to discuss rates on your home and life insurance. Reducing spending in each area will add up to big savings over time and leave you more disposable income to pay down debt or save for the future.

Once you have created a precise budget that accurately reflects realistic spending habits, you’re ready to try it out. Don’t give up if things don’t go as planned at first, it will likely take a few months to find the perfect balance of what you can live on. Once you do, you’ll find that a budget is an important step to reaching financial freedom and giving your family the peace of mind they deserve.

*thank you for this guest post!

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  • Excellent advice! We switched to Consumer Cellular and our bill is 1/3 of what it used to be. We also got rid of DirecTV- we have a Roku w/ Netflix, Sling TV, & Amazon and an antenna for local stations. It took about 3 weeks to really adjust, but none of us would go back. We stopped mindlessly watching so much trash TV that we didn't enjoy and are re-visiting classics that we haven't seen in years, like MASH and Magnum PI.

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