Do you ever find yourself struggling with money? It’s quite possible that you would love to go on a luxury holiday this year and spend a couple of weeks away from your home and a few hundred miles from your job. But unfortunately, when you look at your accounts the situation is rather bleak. You can’t afford to go camping, let alone a trip to Hawaii. If you’re in this situation, you need to look at some solutions, and you should probably start by thinking about your budget.
No matter how much money you make each year, you should be living on a budget. This is true whether you are making 30K a year or anything up to 100K. Without a budget, it’s difficult to keep your finances in check. We all have a certain amount of money we can spend each month or each year. Even the rich and famous have a budget that they need to stick too. For instance, Johnny Depp has allegedly racked up tens of millions worth of debt because he’s spending money faster than he makes it. That tends to happen when you decide to buy an entire island. But let’s forget about the obscenely wealthy and instead look at how to manage your little budget.
First, we need to think about how to set your living budget. You can get started by considering how much you actually need to spend each month. These are the bills and if you’re self-employed, how much you need to save in tax. Remember, this is not an optional saving and must be treated like any other bill. On top of this, you can add on any purchases that may not be automatic but that you do spend each month without fail. For instance, you can add on the cost of your weekly food shop. Unless you know that the cost of these bills will never change you should overestimate. So, if you think you spend about forty on shopping each month, increase that to around fifty. That way, if you do spend more, it still won’t go over your budget.
Once you have worked out how much you have to spend each month, you can then look at how much you should save. You need to save at least a little every month to ensure you have the cash to fall back on. If you don’t do this, you can find yourself in the position of desperately needing to borrow. Most experts suggest that you save around a quarter of your paycheck each month. If you can’t do this, you should aim for around an eighth and then try and build it up little by little.
The amount of money you have left is yours, and you can do whatever you want with it. Go on holidays, buy a new TV, or update your furniture. Of course, you may discover that either you don’t have any cash left over or you don’t have enough. In cases like this, there are a few things that could be going wrong.
It is possible that the reason why you have no money to spend is because either you’ve missed some bills out of your budget. Or, you had a few unexpected, expensive costs. If that’s the case, you want to re-examine your budget and account for the extra cost. As for unexpected cost issues, you should be able to prepare for any financial problem.
For instance, you might damage your car. If that’s the case, this shouldn’t hit your budget because you should be able to use the money you’ve saved to repair it. Or, perhaps you have a damaged appliance in your home. This might mean that you have to pay for a repair which is an issue because the cost can be more than you can handle. For instance, it’s possible that your boiler is broken and that can be a few thousand for a repair.
Of course, there may be other cases where while a repair could be expensive, you might be able to fix it yourself. According to Cashfloat, it is possible to learn how to repair most of the issues in your home through DIY repair rather than bothering to hire an expert. Although, you do want to make sure you know exactly what you’re doing. Otherwise, a bad repair can just lead to bigger bills.
These are just some of the issues that can lead to unexpected bills that hit your budget. There are many more. For instance, you might have to head off on a trip that you didn’t plan for. This could certainly drive up those costs, and you need to watch out for issues like this.
But ultimately unexpected bills are just one problem for your budget, so let’s look at a few others.
Maybe, no matter how much you budget and prepare for extra costs, you never have enough money to save or spend on little luxuries. In this case, you need to look into the possibilities of boosting your passive income. These are ways to make money without really even trying.
One option would be to invest some of those savings and hope that any money that you invest in grows over time. For instance, you can buy penny stocks. Penny stocks are cheap shares in businesses that if you’re lucky grow to be worth a fortune. When this happens, the value of your stocks rise and earn you money. You should invest in a few penny stocks because that way you can increase the chances that you stumble on one that could lead to a wealth of riches. Who knows, you might accidentally invest in the next Apple? Although, the problem with this type of passive income is that it won’t improve your prospects in the short term. That’s why you should also think about setting up a side hustle or two.
As the name suggests, a side hustle is a job that you complete on the side of your permanent income. An example of this would be blogging. You can blog in your spare time and eventually start making some money off it. Doing this is all about finding advertisers and people who will pay you to post information about their products on your blog.
Or alternatively, you can think about setting yourself up as a personal tutor. If you want to be a personal tutor, you just need to think about the subject that you excel in. You can gain a qualification for tutoring and this will allow you to charge more money for your services and it could even become your dream job.
Of course, if you don’t want to eat into your spare time, you can also think about reducing those permanent bills we talked about earlier.
To cut down the bills, you should start by thinking about the amount you spend on energy. It’s possible that you’re unintentionally massively overspending on your energy cost. This may be because you’re not living in an eco-friendly way. For instance, you should consider your car. If you’re still using a petrol car, you might want to consider upgrading to a hybrid. While in the short term this will be an expensive purchase, in the long term, you could actually save a lot of money. You’ll certainly be filling up your car less each month.
Or, how about changing your home to make it more eco-friendly. You should consider upgrading the tech in your home. It’s not a secret that the latest tech actually saves a lot more energy compared to older models. Ideally, you should ensure that all the tech in your home is an A grade. This ensures that it will be saving as much energy as possible.
You can make more drastic changes to your home to save energy too. For instance, you can think about upgrading the house insulation. To do this, you should look into the possibility of changing your windows. Triple glazing windows will be more expensive, but they also trap more heat. As such, you can heat your home and keep it warm while still using less energy and that’s exactly what you want if you’re looking for ways to cut down your bills.
Finally, you should think about the possibility of cost comparing everything you buy. And I do mean everything, from toilet roll to car insurance. If you do this, you’ll find that you can shave a fortune off your monthly spends and keep your finances in check. You might even be able to cut down your spending by 25 percent. You can add all the money you save to both spendings and your budget for little life luxuries. As such, you’ll be able to buy more without impacting your quality of life at all.
I hope you use this advice to improve the way you handle your finances and become a far better budgeter. You won’t regret it because you’ll be able to save more, spend more and enjoy a far better life.