How to Save Money with a Budget

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Create a budget! Most Americans simply do not know when to stop spending. As our economic is going down, it is very essential that we create a budget so that we may free up cash for important savings goals, such as for college or for retirement in the future. The key is, spend less and find ways to adjust to your living.


To get started creating a budget, you can either grab a pencil and paper, or you can try choosing a financing planning software, such as Microsoft Money. Then, find out your monthly income. Once you know what your budget is, you know make sure that you do not go over that amount so that you could start spending and to reduce debt .


Next, write down all the places that you spend money. Utility bills, rent, car payments, that fast food restaurant you always drop by each week, etc. Never assume that anything is too small to record down.


The next step is to break it down into 3 categories. Fixed expenses, which include gas bills, payments, etc. Things you have to pay for otherwise you’d get kicked out would all go in this category. The next category would be things you cannot live without. Usually, this includes food, utilities, and clothing. The last category would be things that you can live without but like having.


Once you’ve assessed your categories, see where you can cut down to save money. Remember, spending less results in more money. Analyze your expenses. You can’t really do anything for the fixed expenses, so look at areas where you can save money. Reduce going out to eat. Cut back on buying coffee on your way to work. Instead, make your own coffee. Cancel any subscription magazines that you are not reading. Do you have to drive to work or is it walkable/public transportation? The key is to analyze in which areas that you can work on to save more money.


If you have debt on credit cards with high APR, try transferring with balances over to a new credit card that offers 0% introductory rates for balance and purchases. Find ways to trim your monthly payments. It’ll help save you a lot in the long run.


The most important step is to strive to achieve your goal. Without determination, nothing is possible. Now that you have assessed and analyzed where you can stop spending to save money, work on achieving it. It takes practice and time, but in time, you will be starting to invest the extra money you have.


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