Is hearing the word “budget” enough to give you chills? Managing finances can be stressful, but it can be made much easier by creating a system for keeping track of your expenses and making sure that your bills are paid on time. An organized budget gives you freedom from financial anxiety.
1. Make a list of expenses
Take a moment to type out a list of any expenses that you have to pay. This could be credit card bills, car loans, or your mortgage. Organize them from most to least in terms of cost. Try to knock out the ones with the lowest balance as quickly as possible. You can also make a separate list for expenses that fluctuate more, such as groceries or gas.
2. Use software
Our brains may be powerful, but they can only remember so many things. That’s why we have computers to do thinking for us. There are all kinds of great budgeting software available. These can keep track of your spending habits and help you make better financial decisions.
3. Set up automatic bill pay
Due dates for bills can come out of seemingly nowhere. Instead of trying to juggle all these obligations, you can set up automatic bill pay. As long as there isn’t any fear of overdrawing, automatic bill pay can make things much easier. Most businesses that offer online billing also have automatic bill pay.
4. Track spending
When you’re looking at your bank account balance or credit card statement, you might shake your head in disbelief, asking where your money goes. It might be a rhetorical question, but it’s one that’s worth investigating. You might find that you’re essentially throwing away money on memberships that you’re not using or brands that are charging more than you should be paying. If you’re running a business, you should invest in a quality receipt scanner to keep better track of your spending.
5. Determine how much money you have
In order to organize your budget, you need to have a comprehensive understanding of your financial situation. A plan to put away $5,000 every month isn’t going to work if that’s your monthly income. You want to estimate your income in terms of net worth and liquid net worth. Work on cutting down your debt and determining how much you need to put away from each paycheck to give yourself more financial stability.
When you’re keeping better track of your budget, the world seems to be open up a bit. You won’t have the dark cloud of financial stress hanging over you. It’s not just a matter of having more money. It’s about making the most of the money that you do have. When your budget is organized, your life is organized.