Taking on the household finances can be a huge burden on your shoulders. It is not a task to share alone, so if you share the household with a significant other, or even bounce ideas off a family or friend that you can trust, so you can make sure that you are in good shape for your financial future. If you are looking to free up a few extra dollars at the end of the month, there are a few smart money moves that you can make.
Create a Budget
Now it may be tough to figure out right off the bat how much you should allot for food, gas, spending money throughout the month, you can be sure to tweak along as you go. Your monthly bills should not fluctuate, so you at least know how much you need to spend in expenses, and from there begin to figure out how much you need for a grocery bill, filling your gas tank, and then spending money, which is where curbing spending is probably the most difficult but definitely pays off in the long run when you are not wasting money on unnecessary purchases.
Reduce Unnecessary Expenses
Spending money is probably where we tie up a good portion of our monthly income, and without setting a limit, you could be wiping out and living paycheck to paycheck, or worse yet, continue to go into debt. A great way to figure out what you’re spending in a month is to take last month’s bank or credit card statement, and circle every item that was not a necessary monthly expense. You will probably be shocked when you add up the totals. You will not be able to cut off all spending after one month, but little by little you should start to see improvement month over month.
Build an Emergency Fund
Money can be so tight, especially on a budget, that if any major catastrophe would happen, how would you pay for it? Probably put on a credit card and sink further into debt. Whether it’s a major car repair or even worse, a job-loss, it would be nice to have a cushion to pay or float you for a few months until you can find new work. If you can create an emergency fund of three months’ worth of expenses, you can protect yourself if anything does occur.
Maximize Saving for the Future
As you continue to free up money every month, more priority needs to be shifted towards saving for the future. You can start by increasing your 401(k) contributions at work, especially if you have employer-matching, of which you should at least contribute that maximum allowed, otherwise you would be leaving free money on the table. Each year you can gradually increase contributions so little burden would be felt, especially if you receive a bonus or merit increase, you can increase that much to 401(k) so you don’t even notice you are receiving any more wages, which would be tough to remove once you get used to receiving.