If you dream of financial success but find yourself falling short of your goals, it may be time to develop a plan. Both budgeting and savings¬†build stability and help to lead to wealth. These two aspects of personal finances are the foundation for your desired success. But, if there is no follow-through, knowing what it takes to live worry-free of money issues is useless. Even in the situation of living paycheck to paycheck, there are quite a few steps you can take to help improve your situation. The following are just a few ways to tackle financial management on a weekly budget.
Financial Management on a Weekly Budget
Budgeting is more than just cutting back on expenses. You need to know some background information on your spending and have a plan in place. Otherwise, you will just end up back at square one. Avoid letting your bills get ahead of your paychecks with these tips:
Make short and long-term financial goals
Before figuring out what your budget should even be, you need to make short and long-term financial goals. Be sure to get specific and write out dates you’d like to reach these goals by. Include how much you would like to increase your savings, particularly based on your needs. Your long-term goals will generally take five years or more to attain so keep that in mind when writing out your¬†objectives.
Determine your net worth
Once you have your goals in place, knowing your net worth will be a good starting place to see where you stand financially. To determine this, you will simply take the value of all your assets, which includes bonds, savings and retirement accounts, etc.) and subtract your debts. Whether a car or home is considered an asset tends to be a matter of opinion. Overall, assets should put money in your pocket and not take out. To learn more about assets and your net worth, check out this article.
Be realistic with your budget
Starting off with creating a weekly budget may be difficult without knowing what it should be for the month. First, determine what your budget needs to be monthly, then break that up into weekly. Don’t overwhelm yourself, and realize that it may also change as you start to reach some of your financial goals. In your order to really make your budget work, though, you’ll need to regularly keep up with your income and expenses.
Be aware of how much money you have coming in each month
Knowing how much you have to work with is an important process in financial management on a weekly budget. In addition to your monthly income, you should include any interest accumulated from savings accounts, retirement funds, financial investments and so on. Account for your net income, not your gross. This is imperative for calculating your income for budgeting purposes correctly.
Know all of your expenses (both necessary and leisure)
With income in place, note all your expenses. Include not only your ongoing expenses, such as monthly bills with your home, groceries, child care, insurance costs, debt payments, and estimated self-employment taxes (if applicable). Anything that is non-essential needs to be incorporated as well. This would include holiday gift purchases, vacations, clothes, beauty, laundry and so on.
With a total number of expenses in place, subtract this from your total money in. From this, you will find your bottom line. If you have money left over, this what you will use to determine what can go into savings or pay more toward debt and see where adjustments need to be made to meet your goals.
Develop spending guidelines
Your bills may¬†have little room for reduction, but you can always call the companies to see what your options may be. Many times you can reduce your bill amount depending on your situation and their terms. For instance, your phone companies often have promotions or can discuss with you other package choices you could downgrade to, especially if you find you do not use as much data as your current package provides. Just stick to your guns and don’t allow them to upsell you.
Alternatively, there are a lot of ways to reduce your non-essential bills. From changing the way you shop for groceries to limiting the extra amount spent on things you don’t need such as excess clothes. You should also consider doing a stay-cation if you are really pinched for cash so you can still enjoy time off without spending money you don’t have (or shouldn’t spend). You can always go on a trip once you have started reaching more of those financial goals.
Try an app
The internet is an awesome place for resources. There are several spending trackers you can use to help you with your weekly budgeting and management. Mint.com, HelloWallet, and Pocket Expense are a few good options to look into.
A major factor of financial management on a weekly budget is organization and dedication. Keep those goals visible somewhere so that you can always have a friendly reminder of why you are doing what you are with your money.
What tips would you add to the list?¬†
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