Once you have created a budget and projected your expenses into the next 12 months, there are additional steps you can take on a daily and monthly basis to improve your cash flow. Remember your goal is positive cash flow that allows you to save money for short and long term goals such as remodeling your kitchen, taking an exotic vacation, helping your child with college and saving for retirement.
Add these ideas to your list of budgeting for a new life:
Pay yourself first.
Too many people make the mistake of saving if they have money left over at the end of the month. By setting up a pre-determined amount of savings that is automatically transferred from your checking account each month, the money will be out of sight and you will enjoy the results of savings growth. If you receive your payroll electronically, your employer may agree to deposit a pre-determined portion of your payroll right into your savings account, too.
Give yourself a cash allowance.
Oddly enough, if you have a set amount of cash to spend on lunches or small purchases for each week, it’s harder to spend it. Try it!
Use shopping lists.
Avoid spending money on things you don’t need by planning your shopping trip with a list. Shopping will be faster and you’ll spend less if you stick to the list. Make sure that the items on your list are also part of your budget!
Distinguish between wants and needs.
Paying down debt and saving money are needs. Buying cool leather boots or a new tool set might be wants. To be sure, wait a day or two before buying them and see if it’s keeping you awake at night. If it isn’t, it’s a want you can do without — at least for now.
Pay down high-interest credit cards.
Finance charges on credit cards can quickly devour any savings you’ve managed to achieve elsewhere in your budget. Pay more than the monthly minimum or negotiate a debt payment plan to pay down high-interest cards. And, once you pay them off, follow these tips so that you charge only what you can pay off each month. You’ll have more money to save or spend on wants as well as needs!
With these tips and others (like enlisting the help of a Certified Financial Planner® professional), you will keep track of your budget, be accountable and anticipate a financially secure future! You could even model a thing or two to your kids and friends!
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