Budgeting for monthly expenses is not always easy, and sometimes it is difficult to stay on track with your financial goals. Overspending on items and expenses can lead to money problems before you know it. Stop paying extra for purchases. Instead, realize your spending habits, create a budget and stick to it.
Here are a few helpful tips to avoid overspending.
1. Use budget envelopes. After you have created a monthly budget, take funds out of your bank account that you need for each budgeted item. Label each envelope according to your expenses such as “Gas,” “Emergency,” etc. Now, you know how much you are spending and can only use the money that is in an envelope.
2. Develop a splurge fund. Plan ahead and put aside money for the items that you really would like to buy. Add cash to this fund over time until you reach your splurging goal.
3. Stop using credit cards. Out of money from your budget envelopes? Well, do not use the credit card to compensate for unnecessary purchases. Credit cards do not mean that you have additional funds, you will pay for it later.
4. Think in terms of time, not money. How much time do you spend working per day, per week? Now, divide how much you make on an hourly basis by the item(s) you think you need. Ask yourself before making your next purchase, is it worth buying?
Also, there are a few websites/apps that can help you manage your spending.
- Mint.com: Set budget goals and track your spending behavior by category. Mint will send alerts to your phone or email when you exceed budgets, fraudulent charges, and receive bank fees.
- BillGuard: Monitor all of your accounts in one place. Confirm debit and credit transactions as they occur. The app also helps you save money by providing a list of coupons per the places you shop.
- You Need a Budget (YNAB): Budget software at your fingertips in that you can easily adjust your budget for overspending. Also, it is convenient as you can access your budget from all desktops, iPhones, iPads, and other mobile devices via the Cloud.