Analyze Spending, Set a Budget to Get Spending and Savings Back On Track
Wallingford, CT – February 7, 2013 – If post-holiday bills are eating-up all of your money before your paycheck arrives, Connecticut Better Business Bureau advises it is probably time to get back to basics and set a budget.
Consumers may find themselves juggling bigger than expected bills after the holidays, especially if they didn’t pay attention to their spending and credit card use.
The first step is to write down what funds you have coming in, such as salary, child support, interest income, rental income or stock dividends. You’ll also need to keep track of your spending for a few weeks to find out where the money is going.
Some costs, such as rent, car payments or utilities can’t be trimmed. However, most people will find things that can be cut back, such as packing your lunch rather than eating out. Are there things you’re paying for that you don’t need, such as an extra cell phone, computer or car? What expenses are “needs” and what are “wants”? Are there less expensive options available from your wireless provider or cable or satellite TV carriers?
You also may consider finding ways to increase your income, such as taking a part-time job, turning a hobby into a business or holding a yard sale to get rid of unwanted household goods.
BBB has tips and charts you can use to develop a budget on its website. If you find that you’re seriously in debt, you may want to consider working with a nonprofit credit counseling agency, such as Clearpoint Financial, which partners with BBB on consumer spending issues.
Once you achieve a balance between spending and income, consider putting some money away in a savings account or emergency fund.
Smart saving strategies include:
Paying yourself first, putting a small amount aside every week. Even $10 a week will grow to more than $500 by the end of the year.
Building-up an emergency fund equal to at least three months’ worth of income.
Taking advantage of employee benefit plans, such as 401(k) retirement savings plans. These allow you to save money before taxes, and many employers match at least part of your contributions.
Being smart when you choose a savings account. Shop around for the best rates, consider fees and other features.
Don’t just set up a budget and forget it. Review it regularly to see if you’re still on track. If you’re finding it hard to meet your goals, you may need to revise the budget to accommodate your needs.