How to Make a Budget—and Stick to it
You might have some questions on what category each bill falls into. Your cell phone would most likely be a utility expense unless you have a home phone bill that accounts for most of your calls. In that case, your cell phone is probably recreation. The cable and internet bills could also fall under utilities, unless you consider those recreational expenses.
If you add up all these percentages you’ll get 114%, so clearly the experts are assuming you have most of these expenses but not all. So you’ll have to juggle the numbers around to fit your needs. These percentages won’t include all of your spending either, like the wedding present you had to buy for your cousin or the emergency new tire you needed when you got your flat. This means random expenses will either have to come from your savings or you’ll need to reduce one of the other spending categories = eating out less = reduce your food expenses. The point here is that you have options; you just need to figure out what they are and control what you spend.
Step 3: Rearrange your spending and eliminate splurges
So what if your rent accounts for 50% of your income (a problem becoming more common) or you discovered that your credit card bill is taking up more income than your food and clothing expenses? Well, over time, you’re going to have to make some changes. You may need to ride out your current lease and spend only the bare minimum on food, recreation and clothing until then. For other expenses, a little research can do a world of good. If your cell phone is your main line and you’re spending $30 extra on calls, call your phone company and ask about other plans. If you add more minutes to your current plan, you might save more money over time. If you have separate cable and internet bills, do some research to find one company that can provide both services at a savings. If you have one credit card that you’ve had for a while, and are pretty responsible with making the minimum payment each month, give them a call and ask for a reduced finance percentage. Most companies are willing to work with you if you are polite and explain that you want continue with their service but you need to save money too. Plus, there is so much competition between service companies, if one company won’t help you out, there’s another one that probably will.
Most of us have one or two habits that are taking up the remainder of our extra cash. You probably won’t miss your daily $4.00 caffeine and sugar kick if you pack a drink in your bag instead. If you eat out too much and can’t see yourself hard at work in the kitchen every evening, consider ordering from a pre-prepared meal service, which is usually much cheaper (and healthier!) than carry-out. Stop spending 20 cents to send a text message every ten minutes; instead, save all that gossip for a nice relaxing conversation over the weekend.
Now sit back and watch your bank account grow!
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