Investing just a little time in money management could help you save a lot. You will feel more in control of your bills and other dues and can also collect a buffer to plan holidays each year. The additional savings could also be utilized for paying off pending mortgage or put into a pension account. Convinced about taking that step towards better money management? Here are a few simple tips that will help get you started!
- Keep a record of your spending
Begin your budgeting exercise by getting a diary and recording every single penny spent during the month. This will help you become aware of where you’re spending the money so that certain areas of wastage or unnecessary spending can be identified.
- Three-category budget
Experts suggest that most people end up overspending in a few select categories. These typically include buying clothes, entertainment, eating out, and purchasing gadgets. With this in mind, use the data that you have accumulated by tracking your expenses and choose three categories to create a realistic budget. Then you can start monitoring how much you spend in those three areas only.
- Plan to save money
Once your budget is in place, it is time to add another category to it: savings. Traditionally, about 10 to 15% of the income should be put away as savings. If you notice that your spending is too high and you are unable to save much, it is time to exercise some control and limit your expenses in a few areas such as entertainment.
- Reduce your broadband and phone bill
Often, we ignore assessing household bills and continue to treat them as a ‘fixed’ monthly expenditure. The reality is that there are a number of ways in which you can reduce the amount of your regular household bills too. For instance, you could browse a website that compares prices of different supplier to get a better deal
- Have a goal in mind for saving
A great way to feel motivated to save is to have a goal in mind. Think about what you would like to collect money for. It could be anything, starting from a vacation to buying a house. This will give you some direction as to how much time it would take to save money for that goal.