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It's 2014–which means a new year, new start and also the perfect time to get your finances in order. Like many others, one of my resolutions this year is to be more conscious of my spending and to make a real effort at saving and planning for the future. But between student loans, rent, and monthly bills, it's hard to figure out where to start. Luckily, there are certain steps I–and you!–can follow to get on a smarter financial path. Below, check out five ways to budget better this year:
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- Figure out where you're spending your money. We all have different spending habits. Look back on your bank statements and figure where a lot of the smaller charges (which can add up!) are coming from. Is it the daily Starbucks run? Or your weekend dinners out? Once you identify where you're spending unnecessarily, you can cut back.
- Check your credit profile. Knowing your credit score and fixing any errors that could come up in your report can help you figure out exactly where you stand and if you still owe any money for unpaid bills. Then, you can budget to pay them off.
- Budget. Once you know where you're spending and what you have to pay off, take a good hard look at your income and the necessities you need to spend on–food, rent, transportation, etc. Then try to figure out a plan for what's left over. For example, a portion should go to paying down any debt, another can be budgeted towards your weekend spending, another to savings, etc. Compromise where you have to (like once a week lattes instead of daily ones). It'll be worth it in the end!
- Plan for emergencies. No matter how much you budget and save, there's a good chance something unexpected will come up and put a dent in your wallet, whether it's unforeseen car trouble or a medical emergency. The only thing you can do is be as prepared as possible by factoring in these potential costs while setting aside money.
- Stay on top of your finances. It may be a tedious process at times, but keeping a close on your money is crucial. To make the process easier, try using one of these phone apps to help you keep track of your spending.
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