A leaky budget has the potential to result in financial devastation. If you find that you are in a consistent state of questioning as to where your money is going and you experience a lack of funds that is sufficient for the entire month, it is quite possible that you have a leaky budget. It is in your best interest to discover where the leak is occurring and plug it as quickly as possible. In doing so, you will find that you are able to avoid dipping into your savings account, relying on your credit cards, and obtaining high interest loans in order to cover your basic expenses. In this brief financial guide, you will learn budgeting hacks that will allow you to effectively fight a leaky budget.
The first step to fighting a leaky budget is to track your spending habits. This is a relatively simple process. First, you must write down everything that you spend throughout the month. Many individuals elect to utilize a software program that tracks finances in order to complete this step; however, writing down the information may be just as effective. Essentially, you will want to break your spending down into categories, such as “bills”, “debt”, and “Groceries”. At the end of the month, you should be able to quickly see which budgeting categories resulted in the highest amount of spending.
Once you have determined how much you have spent in the previous month, you should take that figure and compare it to the amount that you have listed as available in your budget. In most instances, you will instantly discover the source of your leaky budget. For many, the most common culprits of a leaky budget include hidden fees, impulse buys, interest fees, and excess bills (such as a comprehensive cell phone plan or the most expensive cable television package). When you have discovered the source of your complications, you should determine the underlying cause. For example, if you find that the source is spending too much money on fuel for your vehicle, is it because of the increasing costs associated with gasoline? If so, you should dedicate additional funds each month to that expense, and take away from unnecessary expenses, such as eating out.
Make a Commitment
Once you have discovered the source of your leaky budget and have determined what needs to be done in order to cope with the complication, you should make the commitment to make the changes that are required. Outlining your goals and making a commitment to stick to those goals are two of the most popular budgeting hacks that will help you put the plug on a leaky budget. It is a known fact that it is easier to waste money than to save money. Although you may have the absolute best intentions when it comes to your budget, it is possible for your hard-earned money to “leak” from your budget without even being noticed. By taking the steps outlined in this guide, you will find that it is easy to plug in all of the holes that are occurring in your leaky budget.