Making your money stretch by budgeting.
Just the word "budgeting" can cause even the best of us to squirm a little. No one wants to think about it and there is a strong resistance against the idea of restrictions. The thing is, when you are unemployed and looking for a job, making the most of the little bit of income you have is crucial for surviving long term.
We all know this, but the idea of budgeting just seems too hard sometimes. The thing is, making a budget and sticking to it will allow you to save to reach your goals. Which is totally fun, right?
If you are struggling to manage your finances and want to make a budget, the first step is to break your expenses down into categories. Here are the main ones:
Necessary expenses - These are the things you don't have a choice about. This can be whatever is necessary for you. For example, this could be housing, transportation, insurance and utilities. Depending on your lifestyle, this list can be longer or shorter.
Savings - Paying yourself is important. Put money in savings before you end up spending it on non-essential things. This is something that is really hard for me to do, but I'm trying. I need to get in the mindset that paying myself is more important than having more money to spend on other things. You can't achieve things without making sacrifices and this is also true when it comes to money.
Debt Repayment - This category is for credit card payments, student loan payments and so on. Some people like to add the minimum payments into their necessary expenses category and use this for any additional repayments.
Discretionary Spending - This should be the last category because it is the least important. This would cover things like eating out, clothing and more expensive groceries. With the money in this category, you can adjust how much you spend based on your financial situation. For example, if you are trying to save more, give this category less money.
Once you have your expenses broken down into these categories, you can look at your income and get a clear idea of how to save money in order to meet your larger financial goals.
Do you keep a budget? Why or why not? Please share your thoughts in the comments.
By Melissa Kennedy- Melissa is a 9 year blog veteran and a freelance writer for HealthcareJobsiteBlog and Beyond.com.. Along with helping others find the job of their dreams, she enjoys computer geekery, raising a teenager, supporting her local library, writing about herself in the third person and working on her next novel.
