Creating A Budget For The Present & Future

By Cleveland Jernigan

While spending your money as soon as you earn it might sound like a fun and adventurous way to live, the reality of life is that paying your bills and saving a little for the future is important. Though it might seem difficult, creating a budget and sticking to it can greatly lower your stress level and improve your quality of life. If you want to create a budget, but aren't sure where to start, here are some quick tips to consider.

Before you plan out a budget, you need to know what you are dealing with as far as income and outgoing money. So list your total income as well as all of the expenses you incur each month. This list should include everything, from obvious items such as rent and car payments to your utilities, cell phone expenses, entertainment expenses, food expenses and all the rest. Go over your bank statements as well as your credit card statements so that you don't leave anything out. You might be surprised at how much you spend and on what you spend your money.

Once you truly have a clear picture of how much you spend, you can determine how much money is left over. If it's not enough to budget some for future savings, then you'll need to find ways to cut back. One of the biggest mistakes people make is not paying off their credit cards each month. Credit card companies charge huge rates of interest, and this is money that you are just throwing away. So pay off the balances as quickly as possible and quit using most of your credit cards. You can usually get by with just one card, so just keep the card that provides you with the best reward offerings and pay off the balance each month. If you have trouble with this, just leave the card at home and bring cash instead. If all you have is cash, you simply cannot pay more than you can afford.

There are plenty of easy ways to lower your monthly costs. For example, get rid of any memberships that you aren't really using, such as a movie streaming service or gym that you don't really use. Take a good look at your food costs, too. Planning your monthly meals and sticking to a food list at the store saves you a bundle, but what really keeps food costs at bay is bypassing restaurant foods. Maybe you head to the coffee shop each morning and eat lunch at a fast food place each day. Buy a coffee flask, pack your lunch and you can save a bunch of money. In addition, alter your cable plan and cellular plans to a more cost-effective option or consider bundling cable and phone costs if possible. Turn off lights when you leave the room and conserve water. Keep your thermostat at levels recommended by your utility companies. While some of these are little things, it all adds up to more money for you.

After you assess your budget and trim off some fat, it is time to think about saving a portion each month. This can be money saved to cover unexpected expenses, but also you need to be saving toward retirement. If your company offers a retirement plan, such as a 401 (k), then arrange to have a portion of your money each paycheck deducted and placed into this account. Generally, it is wise to save at least 10% of your earnings toward the future and certainly more if you can spare the money.

Another good option is to contact a financial advisor and look at creating a long-term financial portfolio. This might include retirement accounts as well as investments such as mutual funds, which typically provide a solid return with a fairly low risk of loss. Mutual funds invest money in a wide variety of stocks and bonds, diversifying your money so that it is a safer form of investment than just buying stock in one company.

About the Author:

Cleveland Jernigan likes writing about investments. To get further information about a Renminbi bond fund or to find out more about global energy funds, visit these fund websites now.