Guest post by Aiden White- A writer for consolidatecreditcard.org.
From the very beginning of 2019, many people are rebooting their budget plans to stop and manage holiday overspending. The process isn’t easy, but it’ll take your finances back on track within 4 to 5 months. But why stay there? It is the best time to put your funds in order by taking a fresh look at your budget for the entire 2019. Open up your calendar, ready a spreadsheet, and let’s start working on this year’s budget. Below are some useful budgeting tips for beginners to consider as you dig in.
1. Initiate a clean slate approach
It’s first and best practice you should apply to create and maintain your entire budget from scratch each year. Many people add and subtract categories in their existing budget plan. The clean slate approach is a comfortable way to build a budget, with a purpose to support its cost. Make sure you add each expense which has a profit-driven purpose, known as zero-based budgeting.
2. Anticipate expenses
If you have any significant expenses coming soon which you have anticipated earlier, such as tuition fees, professional license renewals, warehouse-club fees, car payment, grocery tab, cable bill, or a traffic ticket, add that expense into your budget plan as soon as possible. Do not wait until you know the exact value of that particular expenses. It may not give you adequate time to manipulate other costs.
Don’t forget to include positive changes as well – such as income raise, or getting some unexpected fund that may help you to handle monthly budget easily for a couple of months.
3. Be realistic while cutting your expenses
People who want to save more money through a solid budget plan, often think they’ll cut all nonessentials and start making some serious money from the next day. It’s a good plan, but it is important enough to continue the practice. Practically, depriving yourself of all luxuries of life is impossible. Here are some more ideas regarding budgeting tips for beginners.
So, it is better to be to cut a few expenses but keep most of your current spending habits intact. If you have a habit of drinking coffee from a local shop every morning, do not stop that habit. But all you can do is skipping one day after each coffee session, and then go there next day. This way you can save half of the amount you spend each month on coffee, and also increase the chances of maintaining a substantial budget.
4. Estimate conservatively
Estimating conservatively is one of the easiest budgeting tips for beginners. When you aren’t aware of the future value of something, you should calculate the value conservatively. Assume expenses are on the higher side and your income is on the lower side. It’ll give you an advantage if somehow your estimate doesn’t go as planned.
Suppose you have estimated that your regular expenses like utilities, groceries, and gas prices will get a hike by 2%. But practically gas and services should have a higher rate, so anticipated them at a higher price.
5. Save first and spend later
Many people follow a budget plan for saving money. They estimate expenses and keep whatever is left after making them. The best approach is to do the opposite. You may choose to save first and spend later. Saving first and paying after is my favorite method of growing wealth and one of the essential budgeting tips for beginners.
You may save a minimum of 15% of your paycheck every month and start paying your monthly expenses from the remaining 85%. This way, you’ll force yourself to maintain a budget within the limited money along with saving a fixed amount.
6. Review last year results in budgeting tips for beginners
You should keep records on your unfinished goals and goals you are going to meet this year. Consider shaking up your budgeting method. You will get an idea of whether or not you need to reduce your expenses, increase your savings by consolidating your credit card debts or adjust some other investments.
Based on your old spending habits you need to track and allocate your budget. Bankrate.com Chief Financial Analyst Greg McBride said – “Calibrate the amount you’re bringing in on your net income with what’s going out the door. “This is your scorecard to tell you whether or not you’re living within your means.”
7. Check your credit score and credit report
Your credit score has an impact on the interest rates while you apply for credit cards, mortgages, and other types of loans. A bad credit score may harm your budget, stop you from getting credit and increase your interest rates. If you become a victim of Identity theft, you might be getting huge unpaid bills. By creating new accounts in your name and racking up credit card debts can ruin your credit score. So, it is essential to improve your credit score and check your credit report regularly for any errors or signs of fraud.
Once you are working out next year’s budget ahead of time, you can appreciate yourself. Stick to the plan and follow your budget throughout the year. You don’t have to be a god of finance to manage your budget plan successfully. Follow these tips, render hard work and discipline, 2019 will be yours, especially while following these budgeting tips for beginners.
About the Author:
Aiden White is a financial writer who lives in Foster City, California. She started her financial journey in 2015 and has been associated with consolidatecreditcard.org for last six months. Through her writing, she has inspired people to overcome their credit card debt problems and solved their personal finance based queries. Being a debt fighter in her own life, her goal is to share innovative thoughts and knowledge in the debt communities. Get in touch with her at aidenwhitejoe@Gmail.com.