In theory, budgeting should be pretty simple. You make money, you spend money. Sometimes you make more than you spend (Good budgeting!), and other times you spend more than you make (Digging yourself into debt). Once you have downloaded the free budget spreadsheet: Monthly budget example.
For some budgeting income is pretty simple, it used to be for me. I was a full-time salaried employee who made the same amount each month. For others budgeting income is not all that simple. If you are in a commissioned sales role, your money could fluctuate every month. Not having a guaranteed income every month means that you have a further responsibility to budget your income correctly.
Budgeting expenses can be tricky in certain instances as well. Some expenses will stay the same every month: rent, mortgage, cellphone. While others will fluctuate depending on the time of year: utilities, gas, travel. Although these “fluctuating” expenses can be hard to determine, in the big picture of things your monthly expenditures SHOULD (and for your financial sake NEED) to be less than your monthly income generated.
So how did I save a quick $250 a year in the expense portion of my budget?
All I did was… Shop around for automobile insurance. This doesn’t sound fancy at all, but having an extra $20 a month freed up in my budget was something to get excited about. Say you’ve been with the same car insurer since you first started driving; chances are you have a discount for that. However, calling other insurance companies to get free quotes is not only easy, but it is a simple way to cut your expenses. I was with the same car insurer since I turned 16. I thought I was getting a great deal all along. However, when I called a few other insurers, I found a much cheaper rate. So cheap in fact, that it allowed me to save over $250 a year just on my car insurance (FYI, USAA has the best insurance rates and customer service). That savings freed up an additional $20 a month in my budgeted expenses. I could use that extra $20 any way I like.
You can save with almost every expense you have. Whether it is renegotiating your cable bill, or shopping around for car insurance. Find one expense category in your budget where you can chop out a little change. The extra money can be used to pay off debt, go into savings, or fund a weekend getaway. When it comes to budgeting, your expenses are half of the battle. Lowering your monthly expenses is a great way to make your income go further.
Budget Smart, Invest Wise
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