5 Simple Budgeting Tips

Written by , October 25, 2011

5 Simple Budgeting TipsComing up with a budget can be a challenge for just about any household. Preparing a budget requires you to make assumptions about your future income and future expenses, and to get those numbers into some type of balance. As an added challenge, it’s usually necessary to include some extra room into your budget for unexpected expenses.

Since you’ll certainly encounter unexpected expenses at some point, it’s important to incorporate a financial buffer to account for those types of expenses. Traditional financial advice can get you most of the way there, but you might need to use some additional techniques to make sure you can handle things outside your normal monthly budget.

Here is information and advice on five simple ways to get your budget in the best shape possible.

  • Reduce the Number of Accounts You Have. Too many different credit card and banking accounts can make it difficult to keep track of your financial picture. Cut back first on the number of credit cards you have. Secondly, cut back on the number of bank accounts you have. Look for ways to consolidate. For example, a high interest checking account may offer more benefits than having a separate checking and savings account. The fewer accounts you have to manage, the easier it will be to track and control your budget. Additionally, you’ll pay fewer banking fees when you reduce your accounts.
  • Buy In Bulk. Buying in bulk can save you money and help you gain some additional space in your budget. But buying in bulk also requires attention and planning. It might make sense to buy shampoo and soup in bulk, but it doesn’t make sense to purchase fresh vegetables in bulk. Remember that you don’t have to visit the warehouse retailers to save money. Your local supermarket probably already sells many things in bulk.
  • Pay Your Bills All At Once. When you pay bills at various points throughout the month it increases the likelihood that you’re going to forget a payment and end up having to pay late fees. Instead, set it up so all of your payments go out at the same time each month. It’s much easier to budget when everything is paid at once.
  • Automatically Deduct Savings From Your Account. Instead of saving money when you can, try treating your savings like a bill. Automatically deduct money from your checking account into a savings account. For example, deduct $25, $50, or $100 weekly, whatever you can afford. You won’t notice the savings coming out of your account and your savings will grow much more quickly.
  • Consider Major Medical. Major medical insurance isn’t for everyone. However, it can dramatically save you money on your monthly premiums. With a major medical insurance plan you have a very high deductible. For example, you may have a $5,000 deductible. With this high of a deductible your monthly premiums may be cut in half. If you don’t visit the doctor often this may be a better option for you.
  • Use one or more of the five budgeting tips presented here in order to make your overall budget stronger.

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