Budgeting & Saving Money
Budgeting and saving money are fundamental in having a healthy economic life and gaining financial freedom. Determining where the money goes beforehand and deciding how much to save enables a person to be in control of their money. Here are helpful tips provided by Jonathan Osler for successful budgeting and saving money.
1. Create a Plan
The first thing that can enable people to successfully budget and save money is creating a comprehensive plan and sticking to it. Determining which items require finances and how much they need is effective in preparing an accurate budget to ensure efficient use of money.
2. Test Different Budgeting Methods
There exist various budgeting methods for budgeting and saving money. Nevertheless, not all methods work out as expected. That said, it is recommended to try out different methods until the most effective one is identified. Osler believes that selecting a technique that meets a person’s needs and preference is vital for attaining set financial objectives.
One of the best methods is the 50-30-20 rule, in which an individual spends 50% of their earnings on needs, 30% on wants, and 20% on savings and clearing debt. While sticking to the selected method can be challenging in the first days, fully adopting it is beneficial in the long run.
3. Determine Expenses
Determining expenses makes budgeting and saving simpler. While identifying expenses, it is best to differentiate between needs and wants. It is important to prioritize basic needs like shelter, housing, food, clothing, and transportation. Other costs like entertainment and debt should receive attention after all essentials have been catered for. Arranging expenses based on their importance is essential in spending money on things that matter the most first.
4. Open Different Accounts
It is wrong to use the same account for expenditure money and savings. That’s because it’s easy to spend savings if they are easily accessible. The best thing to do is have at least two different accounts. One account should have money meant for fixed expenses like food and rent. The second account can be used for saving money. It is also advisable to have a third account to put emergency funds. Financial problems can affect a person at any time. Creating an emergency fund account and depositing money regularly will come in handy in case of emergencies and financial crises.
5. Make Readjustments
Jonathan Osler stresses that budgeting and saving cannot succeed in the first trial. As such, individuals should regularly review their budgets and savings to determine what needs change. Readjusting the budget every month to eliminate unnecessary things or creating room for a new item is critical in ensuring successful budgeting and saving. The readjustments should also factor in price changes and other issues that may affect the flow of money.
Everyone dreams of having financial freedom, which can be easily achieved through proper budgeting and saving. Mr. Osler advises people to use these tips to help them successfully budget and save their money.