Getting Ahead

The big problem with budgeting is, simply, “getting ahead”. That is, it seems like the money coming in equals the money going out, so the savings are not increasing. Two things have to happen to change this equation. You have to cut back on your savings, and find ways to increase the amount of money coming in.

Some general tips that may assist:

Step #1 – Identify your target.

Consider what you want to accomplish, and be realistic, taking into consideration that you have not yet identified your actual expenses. Set specific goals for yourself. You may want to write the goals down on paper, and post them on your fridge, so that you are reminded of these goals on a daily basis.

Step #2- Complete the Budget.

Use our Budget! It will take time, and may be a tedious exercise, but it is important for you to know where your money is going. You may be surprised!

Step #3 – Spend less, save more. How? Try the tips below.

  • Check out lesser-cost alternatives to non-essential services. For example, instead of having a facial at an expensive salon, try a beauty school which will offer a facial at a reduced rate, the products will probably be different, but you will at least get similar benefits of relaxation. Try shopping at a discount designer outlet. You may only find 1 or 2 great items, but the amount of money that you’ll save on those 2 items may well make the trip worth it!
  • Be realistic Strike off items that are not necessary. Keep those items, which are a “necessity” such as your daily coffee run to Tim Horton’s. You may able to save money be removing all redundant items, but you will be so miserable in a week, that you will not be able to maintain your budget goals.
  • Create a reserve fund for unexpected costs that are inevitable, for example, expenses like car or house repairs. If not, you will run into an emergency when these events occur.
  • Limit yourself to cash, except for large-budget items. When you use a credit card, it somehow feels “less painful” than when you pay cash. The exception is “smart credit card use”; if you have a credit card, which offers benefits such as cash back, you use your credit card in moderation for necessary expense, and pay it off each month, you’ll come out ahead.
  • Review your budget every few months to make necessary adjustments.
  • Pay yourself first. If possible, remove from the pool of available income, those monies, which you anticipate will be used for both your fixed expenses (i.e. Mortgage), and variable expenses (i.e. Power).

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