There comes the point in life when we finally realise we must start cutting extra expenses and create a foolproof budget plan to survive and enjoy life. If this isn’t done, you might lose your belongings and even your house because not all of us save money for the same reasons.
Some of us follow a budget to afford a holiday or to buy something costly, such as a car. Regardless of your reason, there are many ways to create a budget and save money successfully. There are tons of applications designed to develop budgets for users. Alternatively, you can read on for some tips which I created after extensive research and practice.
Use the 50/20/30 Rule to Budget Your Money
Not too long ago, American senator Elizabeth Warren promoted the 50/20/30 budget rule, which has famously proven to be quite an effective method. Even though it comes from America, the law is successful in the UK as well.
The rule says you’re supposed to divide your expenses into three: needs, wants, and savings. Then, it requires you to fix a portion of your money for each category.
Needs call for the most significant percentage of your money, which is 50%. It is because needs are the essential expenses, such as rents and utilities. The second-largest proportion, 30%, is allotted for your wants, which include on-demand subscriptions and eating out often. Lastly, the remaining 20% of your money is supposed to be for your savings, so you can pay your debts and save money for essential purchases.
Pay Your Debts
If you’re trying to make a budget and save money but also have debt, pay the debt first. Believe it or not, you save a lot of money after paying your debts. The amount you spend on servicing your debts each month can easily cross a hundred pounds.
Not having to pay interest on your debt is a huge thing. In this situation, all the money you spent as the attention can be put into savings. Having a personal LOC (Line of Credit) is just one of many options for debt consolidation taken to pay your debt off.
Stop Wasting Food
We, as a nation, need to make conscious efforts not to let our food waste. Most of the people do not know the food they throw away is still edible. There is a difference between ‘use by’ date and ‘best before’ date.
If a food product has passed its use-by date, make sure you are not consuming it as it isn’t safe. However, if a product you bought has passed its best before date, you can still consume it as it is safe, but its quality might be compromised. We can save so much food and money if we make an effort to use everything we buy.
Don’t Overindulge on Payday
According to a UK survey, one in every five people spends their monthly income within 48 hours of getting paid.
You must always keep some money for your essential outgoings, prioritise the necessities, and, instead of splurging your wage on things which aren’t very important, make sure you are separating some amount for your savings for a rainy day. Through this way of budgeting, you would know how much disposable income you possess.
Get Rid of the Extra Stuff
According to a survey by the well-known company, eBay, there is a 60% chance which one has more than 50 items stored away they don’t use. When calculated, the estimated value of the belongings was £483! Therefore, I recommend you to sell all your unwanted stuff online and turn it into cash.