Getting your finances in check is tough, especially if you have not been keeping track of your budget. One of the most overlooked questions when sorting out your budget is also one of the simplest; how much do you spend each month? Despite the simple nature of the question, the answer is a complicated one, especially since spending varies month to month. To help simplify the process of keeping track of your spending we have listed a few key variables that will help you keep a healthy budget.
The first step is to keep track of your monthly expenditures. These costs include rent, utility bills, Netflix subscription, Phone bills, etc. Since these charges are normally split into monthly charges, it is easy to keep track of. You may run into problems if the fees are not consistent, like for utility bills, but this is where you are able to estimate future costs using previous data from the year before.
A slightly more demanding practice to keep track of your spending is to log your weekly out-of-pocket expenses. The easiest way of accomplishing this is to save every receipt you receive over the course of the week, then add them all up at the end. Once you have a few weeks of tracked expenses you can average them to find out the average amount you spend weekly. You are then able to add your weekly expenses into your monthly budget to better understand how much you spend total each month.
Next you must identify long term expenses, so you don’t have to dip into your savings to purchase the more big-ticket items. These expenses include buying a new laptop, completing necessary home repairs, etc. It is almost impossible to know when you will need to pay for such matters, which is why you should estimate some big purchases and a time frame for when you may need to complete them. Laptop 4 years old? Washing machine breaking down often? Factor into your budget purchasing a new one within the year, and if you end up not needing to make the purchase you will have already saved up enough for the next time you do have to buy a big-ticket item!
Once you have all the data it is finally time to tally up the numbers and find ways to save. Once you have figured out how much you spend each week, month, year you can identify places you can save a few bucks. After you implement these savings you can sort out a final expenses sheet, then feel more confident about your financial situation and not have to worry as much on overspending in the future.
An outlier to this consistent data takes the form of hidden fees banks charge which are buried within the small print. A simple way to avoid this is to join My Allegro at www.myallegro.com which charges simple, flat monthly fees with no hidden costs which make keeping track of your spending a walk in the park. Additionally, we also help you get your saving on track by offering financial education as a standard on all our plans as well as alternate ways to save, including inexpensive roadside assistance and exclusive coupons and discounts tailored to your needs.