So you’re sitting there living paycheck to paycheck and you ask you’re self “What can I do to stop me from being broke?”. The answer is fairly simple, Stop spending more than you make. If you are using credit cards monthly and you don’t pay off the balance every month, or have no credit check personal loans then most likely you are spending more than you make. What you need to do is take an inventory of your expenses and create a simple home budget. This means making a list of your fixed expenses and then subtracting that from your income. Like this:
Yes, power and water can vary but you can figure out how much you’re probably going to spend next month by looking at previous months. This will show you the money left over, that you can spend on everything from food to going to the movies. The point of this is to get into your mind how much you have to spend every month no matter what. Most of the time people think about all of these items separate like I have rent for $557, and my powers around $75. But when you think of it in total then you can start to comprehend how much money you actually have, that’s what a simple home budget can do for you.
Next, you can start breaking the rest of the money up into other categories like this:
The importance of having a category for saving is so that you pay yourself, just like you pay a bill. I’d recommend, after your simple home budget is made, to put the savings with the fixed expenses so that its a nonnegotiable expense. It should look something like this:
What ever money you have left over at the end of the month can be scooped into savings toward your financial goals.
That’s pretty much it. Not too difficult. The hardest part is to actually stick to it. The best thing to do is to create goals that you want to save for, so that you can think of those every time you want to buy something else you probably could live without. So start your simple home budget today.