With costs rising on everyday expenses, following a budget is critical now more than ever. Food costs are up almost 11%, which is the largest price increase since 1981. Gas prices are approaching $5 a gallon. However, by following a budget, you can have a better understanding of what you are spending your money on and how to make small changes to add some income back into your monthly budget. Here are some budgeting tips to get you started.
Track Expenses –
Take a month to track everything you are spending. It can be as small as a coffee in the morning before or as large as a television. This will help you understand what you are spending on things like groceries and gas and it will help you identify the areas in monthly spending that you aren’t keeping track of, like eating out, online shopping, or buying coffee. Once you identify expenses that are poking holes in your budget, you can start to plug the holes by reducing spending.
Identify Wants vs. Needs –
An important part of budgeting is making sure you are prioritizing your needs over your wants. A need is something that you have to have, like housing, food, utilities, or transportation-related costs. A ‘want‘ are things that you like to do or have, but your survival isn’t dependent upon them, like eating out or shopping for miscellaneous expenses. Make sure your needs are your top priority in your budget.
Pay Yourself First –
Even though we’re spending more on basic expenses because of inflation, it’s still important to find ways to set aside some savings. The easiest and most consistent way to save is by having a set amount deducted from each paycheck and deposited into a savings account. There are other less structured ways, like saving your change or setting aside any $5 bills you have. There are also apps you can download that will round up your purchases and then place the money into savings.
Talk to a Financial Counselor –
If you’re unsure where to start when it comes to your budget, then reaching out to a financial counselor for help is a good first step. Advantage Credit Counseling Service, Inc. is a nonprofit organization based on the Southside. An Advantage counselor can walk you through setting up a budget after an analysis of your income, expenses, and debt. Counseling sessions can be done over the phone or virtually and are offered at no charge. All Advantage counselors are certified by the National Foundation for Credit Counseling. Call 1-888-511-2227 to schedule an appointment or visit the website www.advantageccs.org.
