One of the problems with being in debt is that when you’re trying to live frugally you’re all the more tempted to make the silly purchases you don’t need. One of the best ways to avoid these frivolous purchases and make ends meet is by setting yourself an annual budget and making sure to stick to it. A well written budget will not only help ensure that you’re paying off your debts, but that you’re saving what you can along the way.
Depending on whether this is a business budget or a personal one, your budget may look a little different. Either way, the first thing you need to do is figure out how much money you make every month. This is always the most fun part of your budget building as you get to feel rich for a brief spell – especially after receiving bridging and development finance from KIS finance. Unfortunately the next step of the process is in figuring out what you owe and who you owe it to. Whether you owe a multiple debts to a lot of people or you have a single consolidated loan to pay back, it’s important that you pay back these debts on time if you want to avoid extra fees and fines.
Once these two key aspects of your budget are in place you can move onto your monthly fees and bills. This covers everything from your rent or mortgage to your cell phone and utility bills. There’s also expenses like gas, transport to and from work and of course your monthly food bill – that last one is particularly important! At this point you should be able to work out how much money you have left every month, and work out a schedule for how much you can pay and whom you should prioritize paying back first. Don’t forget to leave a little wriggle room for a rainy day or an unexpected problem like when your refrigerator breaks or your car breaks down.
Of course, if you’re doing this for business purposes you won’t have expenses like food bills and a new pair of shoes for your kids. Instead you’ll probably also find that the numbers are bigger, with more money owed to more people along the way. Either way, staying the course and sticking to your budget is of the highest importance. This is the most difficult when it comes to personal finance, as frivolous purchases become easier to justify. When it comes to whether or not you should get that new TV or video game, ask yourself if it’s a need-to-have or simply nice-to-have. If it’s the latter, don’t be afraid to buy it if it falls under your allocated disposable income – but if you find yourself wondering whether or not you will use that video game console in 2 months’ time, it’s probably better to avoid buying it until you have a more compelling reason to splash out.
There are plenty of other little things you can do to help you keep within the confines of your budget, too. These include keeping a copy of your budget on your cell or in your wallet, eating before going shopping (seriously, this works wonders), developing a distaste for high street coffee chains and working out how many hours you have to work to pay off each purchase you make. That last one will save you a surprising amount of money in the long run!
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