Budgeting is a pretty basic thing and it’s something that we should all strive to get right in life. But it’s also something that many people struggle with or ignore because they don’t want to confront it directly. If you want to find out more about how to budget your living expenses better, the ideas we’re about to discuss will help you achieve that, so read on now.
Dedicate Half of Your Income to Needs and Necessities
One of the best tips you can implement when setting your new budget is dedicating half of your household income to the basic things you need to pay for each month. That includes the bills, your housing costs, food and things like that; all of the necessities. That leaves the other half of your income that can be spent on other things, which we’ll discuss next.
Limit Spending on Wants to Roughly 30%
The next 30% of your income should be spent on the items that you want to have but that you don’t necessarily need. These might be the entertainment subscriptions, the video games, nights out and expensive food items that don’t qualify as necessities. All of that stuff goes on the wants category and shouldn’t exceed 30% of your income if you can help it.
Save and Invest the Remaining 20%
The final 20% of your monthly income should go towards your savings and long-term financial goals. It will depend on how much risk you’re willing to take with your money. You might want to simply stash that money away into a savings account. Or you might want to put it into stocks and other financial assets that you hope will appreciate in value over time.
Find a Balance When It Comes to Your Housing
Finding a good balance between the housing that you feel is ideal for you and the housing solution that works best for you financially is something you should give some thought to. Find the best apartments for you that also don’t leave you having to sacrifice other important things because of the financial burden being placed on you by your housing costs.
Always Compare Your Options and Look For Cheaper Deals
It’s a good idea to compare the options carefully when it comes to finding deals for the things you need. That means comparing the options when you need to make a big purchase. And it also means regularly checking to see if there are better deals out there for your utilities, insurance and things of that nature. It often makes sense to switch to a different provider in order to save money, so keep that in mind.
As you can see, budgeting doesn’t have to be a major headache for you. There are so many things you can do to work on your budget and control it better. And if it’s something that you know that you need to get better at, starting with the ideas discussed above is a good idea.