One of the best things you could ever do is get your finances under control. Some of us are us are guilty of overspending. And before we know it, we find ourselves buried in debt. But there’s a way out. You only need to learn how to spend less than you earn. Flair will walk you through the process.
ANALYSING FINANCIAL HABITS
Analyse your financial habits so you can see exactly where your money is going. Keep a record of all your spending on your phone or computer, if that’s a better option, and start jotting down all the things you’ve bought. Do this for at least three months so you can have an idea of your habits. This is also when you’ll separate your needs from wants. Prioritise your needs and make saving a goal.
MAKE A BUDGET
You have to be realistic when making a budget. Since you’ve figured out your monthly spending, it’s time to create a practical estimate of your income and expenditure. There are many budgeting plans, but the 50/30/20 rule is an excellent one to start out with. This allows you to cover current expenses, debts and save for future expenses. But don’t forget to track your progress. That’s how you’ll know if the plan works for you.
CUT BACK ON EXPENSES
If you like to save money, this should be a relatively easy task. It’s worthwhile to look for bargains when shopping. But you can also consider avoiding some expenses completely. Plus consider cutting down on bills like managing the use of your blow dryer, ironing weekly, switching to energy-saving fluorescent bulbs and reducing the number of hours you use the fan. Exploring the option of finding inexpensive entertainment deals also works well with cutting back on your expenses.
BUILD AN EMERGENCY FUND
You’re probably wondering how does an emergency fund help you to spend less. It gives you the freedom to make the next move when you find yourself in challenging situations. You can start by saving a month’s expenses. That way you’ll know for sure that you can sufficiently cover your living expenses for a month if a financial catastrophe strikes. A high-interest savings account will help too.
USE SURPLUS WISELY
After covering all your expenses and possibly debts, you may find yourself with some extra money. What will you do? You don’t have to spend it. You may consider putting it in your emergency fund. Or you can pay a little extra on your debt. That way you’ll be debt-free sooner than you had planned.
Follow these steps and they will make a big difference. You’ll be spending way less than you’re earning.