Personal Budgeting Tips For First Time Budgeters
Creating a budget is arguably the most important thing you can do as part of effective money management.
It tracks your income and spending and outlines financial goals and how to achieve them. Budgeters are twice as likely to say they don’t have financial worries compared to those who overspend because they don’t outline a budget.
If you’ve never created a budget, the thought of it may be intimidating. The reality is they are easy to create even for first-timers. Here are some of the most important personal budgeting tips to use when crafting your very first budget.
Budgeting Tips For Setting Up Your First Budget
Decide What You Want Your Budget to Do for You
There are many reasons to make a budget and they can include a range of information. What you want that information to be is entirely up to you.
One of the best first personal budgeting tips is to determine why you’re making this budget. Is it because you’re living paycheck to paycheck and want to break out of that cycle?
Are you trying to save more or determine what you’re spending the most on? Do you have a financial goal in mind like paying down debt or buying a home? Defining your goals early is key to effective budgeting.
Be Thorough and Honest
One of the most basic personal budgeting tips is also one of the most important. For any budget, you will need to make sure you are documenting everything: all sources of income and then all the spending you do each month.
Include your salary but also any income you get from side gigs or sources such as unemployment benefits and child support.
Your expenses aren’t just your biggest bills, such as your mortgage/rent, utilities, or car payments. Be sure to include all those little extra spending habits, such as going out to eat, subscriptions to TV streaming services, and gym memberships.
You can even go beyond the monthly expenses and include quarterly or annual expenses.
One of the top personal budgeting tips recommended by financial experts is starting with the big four expenses first — shelter, food, transportation, and utilities — and going from there.
Subtract your expenses from your income and see where you stand. Then identify some spending habits that you can cut back on or eliminate entirely even for just a temporary amount of time.
Try the 50-30-20 Method
Many first-time budgeters may find having a system to follow helps with managing expenses. One popular approach is the 50-30-20 method: devote 50% of your income for needs (the big four), 30% for wants, and 20% for either paying down your debt or committing to savings.
Revisit Your Budget Periodically
Creating a budget isn’t a one-and-done thing, especially if you have specific goals to track. It pays to go back occasionally and track your progress or trim down certain spending categories if times get particularly tough or there is a sudden financial emergency.
You can even adjust the 50-30-20 rule to add more of your income to savings and less overall to wants.
Have a Budget Cushion
Beware of any list of personal budgeting tips that do not include the creation of a buffer. It’s vital. This is something separate from the amount you’re devoting to savings, a small amount of your choosing that you can set aside every month for miscellaneous needs.
That way, when an emergency occurs, it won’t create too much havoc on your budget. Having this buffer in place will also help you reach your financial goals faster.
Know Your Options for Overcoming a Financial Emergency
Buffers are fantastic, but occasionally you may find yourself needing some extra help when you must deal with an emergency.
A car title loan is an option that uses your vehicle’s title in exchange for a short-term loan designed specifically to help with financial emergencies such as a huge emergency room bill, last-minute but unavoidable travel, and vital home and car repairs.
At Wisconsin Auto Title Loans, Inc. you may qualify in as little as 30 minutes for a car title loan of up to $15,000. The other best part: You keep your car for the duration of the loan and if you qualify, you can get the money you need the same day or the very next business day.
And it all starts online. Just fill out the short car title loan form on our homepage. Very soon after you submit the form, one of our loan representatives from the Wisconsin Auto Title Loans, Inc. location nearest to you will give you a call.
They can answer any questions you may have about car title loans and guide you through the rest of the fast and easy loan process.
Get Started Today
Personal budgeting tips for first-timers should always include ways to move past a financial emergency quickly to get back on your best financial feet. A car title loan may help. Just head to our homepage, give us a call or visit us today.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.