Whatever your income level may be, it’s always a good idea to create a budget. The way you think about your money can help you live comfortably with a lower paycheck, or cause financial trouble even with a cushy wage. Creating a budget that fits your individual finances will go a long way for your quality of living, your credit score, and your long-term finances.
Below are some tips on how to create a budget that fits your everyday expenses, your financial goals, and your flexible spending, as well as ways to stick to your budget once you’ve set it.
How to create and stick to a budget:
Your budget should be comprised of about 50% living expenses, 30% personal spending, and 20% financial goals like paying off loans.
Tips to Stick to Your Budget:
- Lower expenses by eliminating bad spending habits and lowering bills where you can
- Increase your credit score to save money on deposits and interest rates
- Manage your debt properly and be cautious when creating new debt
- Increase your savings for emergencies and other expenses down the road
Track your spending with your bank statements regularly to see how you can lower your expenses and keep an eye on stopping fraudulent purchases.
Using these basic tips will help you start a budget that fits your income and your lifestyle. The important thing to remember is that sticking to a budget can require sacrifices. Instead of a high-rise loft in the city, your set budget may only let you rent a small place in the suburbs. Instead of a morning latte from your favorite coffee shop, you might need to make your own most days. If you are strict with yourself and stick to your budget, you will benefit greatly in the long term, and might even gain financial flexibility later on.
Take control of your electricity budget with a prepaid electricity plan from First Choice Power. You choose how much you want to spend on electricity before you use it, and we’ll text or email you how much electricity you’re using and how much remains on your balance.