How To Set a Budget To Save Money: 6 Tips To Follow

If you find budgeting for your future a difficult task, simply continue reading to discover 6 tips which are designed to make budgeting a simple task.

How to set a budget to save money: 6 Tips to follow

1. Write down your short-term and your long-term financial goals

You’ll find it far easier to commit to following a monthly budget if you are clear about what your short term and long term financial goals. Examples of short-term goals include putting aside $2,000 for a fun-filled overseas family vacation or saving enough money to purchase a new car. Whilst examples of long-term financial goals may include saving enough money for a house deposit, saving for your retirment or paying off your mortgage.

2. Figure out how much money you’d have to save each month, in order to meet your short-term and your long-term financial goals

Once you’ve written out your goals and given each goal a due date, it’s time to calculate how much money you need to put aside into a savings account in order to meet all of your financial goals by their due dates.

3. Figure out how much disposable income you have each month after you’ve paid all of your monthly bills and living expenses

Your next task should be to figure out how much disposable income you take home each month after you subtract all of your monthly bills and your living expenses from your monthly income. Next, figure out if you have enough money leftover to save the amount of money, which you need to save in order to meet the financial goals which you identified above.

4. Use the money which is left over from your living expenses and savings commitments freely

Any money which is left over, once you’d substracted your living expenses and savings commitments from your disposable income can be used for luxury items such as clothes which you don’t need, movie tickets or takeaway coffees.

5. Consider setting up automatic payments in order to transfer funds from your everyday bank account to your long-term savings account

It’s also worth setting up automatic payments so that every time you receive a work payment a portion of your income will be automatically transferred to your long-term savings account. Which will significantly decrease your chances of being tempted to spend money which you’ve earmarked for savings, on items which you don’t require.

6. Look for new ways to decrease your living costs

As an example, you may be able to decrease your living costs by a significant amount by simply switching the grocery store which you shop at or by forgoing purchasing branded products in favor of purchasing inexpensive generic brands of products. Alternatively, you may be able to decrease your living costs by finding an electricity company which offers you a better deal on electricity, than your current electricity company.

So if you’re looking to set a realistic monthly budget which you can actually stick to, it’s well worth following all six of the helpful budgeting tips which are listed out above!