Budgeting 101: How to Handle Your Money Like a Pro

Budget Concept Budget text on calculator

Not everyone is gifted with the ability to handle finances wisely, and not everyone is born with a silver spoon in their mouth. We cannot live like a millionaire on a teacher’s salary. We cannot afford a designer bag without using our credit cards and paying for the full amount during the due date. But here’s what happens when you don’t stop using those credit cards on top of your mortgages: You end up filing for bankruptcy. You will have to hire a foreclosure defense attorney in Salt Lake City just to get relief. Here is how you can handle your finances better:

Create a Budget

Many people don’t like listing down their expenses and knowing what kind of lifestyle they can actually afford based on the money left to them after subtracting the expenses from their income. But budgeting is a critical part of handling your finances well. You need to list down your payables each month. You need to know how much you can spend for fun and entertainment and whether you’re earning enough for yourself.

Find Side Jobs

Once you realize that you’re not earning enough to save even a dime, you can find side jobs. There may be things you like that you can do on the side. You can also apply for a part-time job so that you can cover some of your expenses—rental fees, electricity bills, phone bills, food, and many more.

Track Your Spending

Take one month to track down how much money you spend. This will give you an idea in which areas you need to cut down on your expenses. Have you been eating out too much? You may find out that a big portion of your budget is being spent on restaurant food. Maybe you can eat out once or twice a month, but for most of the month, whip something up in the kitchen.

Have an Emergency Fund

Your budget suffers because of emergency expenses such as car repairs and medical needs. Save a portion of your monthly income to cover for these emergency expenses. You can avoid the hassle of having to use your credit card if you have the money to spend on non-budgeted needs.

Don’t Commit to Recurring Monthly Bills

Just because you can afford it doesn’t mean that you have to apply for another mortgage. Banks approve your loans based on your income and the debts in your credit report. They don’t know about any of the other obligations you have. If they approve your loan, it doesn’t mean that you can afford the monthly payments. Only you would know how much you can spend in a month, so don’t go overboard.

Go on an All-cash Diet

Travel budget - vacation money savings in a glass jar on world map

Instead of using your credit card for purchases, why not go on an all-cash diet? This means spending only cash for the whole month. Notice how good it feels to see that there are no new purchases listed on your credit card bill? How about doing this for good? Don’t use your credit cards unless you absolutely have to. That will save you from having to pay those huge interest rates.

Invest in opportunities that can increase your monthly income. This should also set you up for your future retirement. Always plan because there’s nothing worse than having to work until you’re in your 60s.

About the Author

Scroll to Top