Lifestyle

How to Accurately Budget Your Money

how to accurately budget your money

There is a lot of information out there emphasizing the importance of having a budget, but what good is a budget if not done correctly? Don’t just blindly write down how much to save each month without doing a little work first. Whether you are a college student preparing to graduate or you need a refresher, this article will teach you how to accurately budget your money. If you’ve never properly created a budget before, you’ll want to keep reading.

Why Create a Budget?

Even if your financial situation seems steady and strong, you should still develop a budget. Budgeting is not just for those who need to get their finances in order; it’s for anyone to help them be prepared for any unwarranted circumstance and to avoid wasteful spending. Who feels good when they waste money? I know I don’t. To determine what your budget should be, you need to know what you’re working with. The following steps will help you create one that is realistic for you so that you can also stick with it.

How to Accurately Budget Your Money

  • First, keep this in mind: Don’t pull a 180. While it is important to stick with your budget once created, it is also unrealistic to limit yourself from everything. You should not also expect to be extremely frugal, otherwise, you might be more likely to break your budget from frustration. Don’t set yourself up for failure. You can stay committed by making simple lifestyle changes instead of giving up everything.
  • Step 1: Get the numbers down. Grab a piece of paper, pencil, and calculator (or simply start a new spreadsheet). On the paper or spreadsheet, create two columns; title one “Expenses” and one “Income.”
  • Step 2: Gather your bills. Gather your bills and expenses that you pay regularly on a monthly basis and record these under the “Expenses” tab. Make sure to include everything including spending money or any type of allowance you’ve given yourself. In order to ensure you didn’t miss anything, check credit card bills and bank statements. Bills that you pay quarterly or annually can just be averaged out per month.
  • Step 3: Add the numbers. Once you’ve figured out all of your ongoing expenses, add them up. Of course, months can vary from one to the next with finances, but this will give you a reasonably accurate idea of what you spend. (At least, what you have to spend.)
  • Step 4: Record your income. Once you have the monthly spending determined, you need to record your monthly income. You’ll need to incorporate all forms of revenue, not just your paycheck. This includes money accumulated from interest, payments from roommates or tenants (if applicable), passive income, and so on. Once you are sure you have included everything, total the numbers.
  • Step 5: Subtract. Following the completion of your “Income” column, you’ll subtract your expenses from your money in. If the result is a positive number, you’re doing OK. With money left each month, you can use this toward paying off debt, adding to a savings account, or to invest. However, if the number is negative, you’ll have to make some changes to your spending before moving forward. If you can’t increase how much money you are bringing in, you’ll need to reduce how much money goes out of your pocket. Some companies may be able to put you on a financial hardship program or offer some other alternatives such as debt consolidation.

Hopefully, you’ll find these steps of how to accurately budget your money helpful. Even if you feel hopeless right now, you will be in a much better place in a few months from now if you follow the above steps.

Do you have any tips to add? 

 

More about money:

How to Say No More Often: The Cost of Being a “Yes-Man”

How to Say No More Often

I’ve spent most of my life afraid to disappoint people. This has caused me to put myself after everyone and everything else, especially work. Work first, play last, I’d think to myself. I would take on projects or serve on committees even when my schedule was already full. The new crafts I’ve been dying to do would be put off, and that time would be given to something else. I truly always wanted to help people, and I believed I was being helpful by always saying ‘yes.’ What I’ve realized, though, is that no one really wins when you take on too much. So, I’ve learned how to say no more often, and in today’s post, I cover how you can too.

The Cost of Being a “Yes-Man”

It’s important to realize the cost of being a “Yes-(Wo)man.” While you should strive to be selfless, it is also absolutely OK to have selfish moments. When you commit to everyone and every task, you leave little room for rest, both physically and mentally. But, more importantly, you leave little room for yourself. In fact, Psychology Today advises to actually schedule time for solitude, in this 2012 article by Sherrie Bourg Carter, Psy. D.

Solitude, she writes, “helps to improve concentration and increase productivity.” The more you are able to concentrate, the more productive you will find yourself to be. Wasted time can be reduced or completely eliminated through this process.

For me personally, I found myself to always be thinking about the next thing I had to do, instead of just dedicating all my attention to the task at hand. It caused feelings of resentment as well. Granted, at this point in my life, I was also working a full-time job, started two side businesses, and was the Marketing Chair of more than one committee plus served as a board member for my local arts council. As you can see, the word “no” was essentially non-existent. But, I dove into all these side projects because I truly believed in them and enjoy being part of a greater cause. So, how do you know what to say no to? How do you do this without offending anyone?

How to Say No More Often

It is definitely possible to still be helpful while also staying true and mindful to yourself. Here are my suggestions:

Prioritize

When choosing what to take off your commitment list, begin by prioritizing. What is causing you more harm than good? Is there anything that you are not fully connected to or feel you are failing to meet expectations due to lack of time (or energy)? What are absolute musts that you cannot get rid of?

Prioritizing is not just job or community-related; it also refers to friends and family. Do you over-extend yourself to certain people who may not return the favor in your own times of need? Learn to let go of those feelings of obligation for people who cause more stress and pain in your life. It may be time to make some cuts for your health.

Ask Who (or What) You’re Serving

If you serve as a volunteer on a committee, do you believe in the cause? Or, is it that you just agreed to sign up because you were asked and did not want to say no? When using your free time to donate to others, consider why you chose to do so. Commitments in your life that just take up free space in your mind without meaning may need to get pushed aside until you have fewer responsibilities.

Actually Saying the Word No

The hardest part is surely actually saying no, but don’t overthink it.  Once you know how to say no, you’ll see more people understand than what you originally thought. If work is the main culprit, you can also let your employer know when you are unable or unrealistically able to take on more work. Be respectful, of course. Approach your boss in a professional way, showing him or her your present workload. Be sure to explain your concerns about productivity and discuss alternative solutions. Together, you may find other efficient ways to complete the work. This recently happened to a friend of mine, and he was able to show his employer that he needed more help in his department in order to continue with business growth.

You might find that as you begin turning down projects and people more, some individuals may be left disappointed. However, their disappointment (if existent) will quickly dissipate and your mental health will improve. Be honest with not only the people involved but also yourself. Let people know how busy you are right now but thank them for thinking of you. Another way to say it would be informing them you, unfortunately, cannot commit and worry you would not be about to put forth 100% energy to their request, even if it is just a party invitation. How much time can you actually give to extracurricular activities?

When you transform from being on board to everything to picking and choosing, you’ll notice the quality of your current commitments will be better than ever. This process of practicing how to say no creates a healthy relationship with being helpful…and yourself.

Are you a “Yes-(Wo)man?” What challenges have you or do you notice in your own life?

Motorcycle Insurance Costs for First-time Bike Riders

insurance costs for first-time riders

Spring means clear roads and sunny days ahead, which motivates us to be outside more. Perhaps one way you plan on enjoying the nicer weather is by feeling the wind in your hair…literally. Motorcycles are perceived as a cheaper (and much more exciting depending on who you ask) alternative to your standard vehicles. However, what newbies don’t put into account is motorcycle insurance costs for first-time bike riders. Is it more expensive? And what all factors are considered for these costs?

Here is what you need to know about insurance costs for first-time bike riders:

What to Expect

Even though it may seem that motorcycles should have cheaper insurance options than regular motor vehicles, this is not always the case. An older car may have lower rates than a brand new street bike, insurance company Trusted Choice explains. They go on to say that rates do depend on where you live, the type of motorcycle, and how often you’ll ride. For example, if you live in New York and will only ride three months out of the year, you will pay less in insurance costs than someone who will ride every season, they say.

But, regardless of where you live, two factors come into play for higher insurance rates: age and experience.

What You Need to Know

Insurance costs for first-time bike riders tend to be higher. In an article by James Hirby on The Law Dictionary, younger and newly-licensed riders should “expect to pay a substantial premium” for a motorcycle policy. The reason for this, he writes, is that national statistics show younger riders are more likely to be involved in serious accidents, unlike older, more experienced drivers.

Along with age and experience, if you also live in an area with higher accident and crime rates, you should expect to pay a higher premium due to increased risk, Trusted Choice adds.

How often you plan to ride also affects your rates. For instance, if your bike will be your main source of transportation, this will lead to paying more on your policy. Conversely, if you plan to only use it leisurely, you will pay less.

What You Can Do

Naturally, one way to see about reducing the amount you’ll pay is to do a price comparison between companies. You should do this prior to even purchasing your bike.

Another way to reduce insurance costs, Hirby and the Law Dictionary staff advise not purchasing collision or comprehensive insurance on the bike. They say that if you bought the bike with your own money, you are not obligated to pay for the cost of repairs in the event of an accident. This alone could save you an extra $100 per month.

Additionally, Trusted Choice notes that bikes with larger engines that are more powerful will also affect your insurance costs. As a first-time rider, spend your first few years on a smaller bike in order to reduce your premium. You can always upgrade later. (And, you’ll be able to afford to do so a little more easily.)

Lastly, you should get your motorcycle license and take a rider training course to reduce your premiums. This will show insurance companies that you took the time to learn how to become a skilled, cautious rider.

The good news is that costs will go down with age (and experience). So, be patient and wise about your decisions, and you’ll be enjoying that open road at lower rates in no time.

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Are you or have you been a first-time rider? Do you find these tips useful? Share your own thoughts and tips in the comments below!