How to Regain Control of Your Monthly Budget

By Your Health Magazine

Your Health Magazine

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How to Regain Control of Your Monthly Budget

You may be looking to review your monthly budget for any number of reasons. Perhaps you recently had an expensive bill that set you back, you find yourself running out of money every month or you want to save up for something important. No matter the reason, there are ways to get your finances back on track.

Keep reading for some steps to take to regain control of your monthly budget.

Track your expenses

First, it’s important to know exactly where your money is going. Tracking your expenses, either by writing them down or recording them in a spreadsheet or app on your phone, is a good way to get started.

Look back over all your expenses for the past few months, including rent or mortgage payments, childcare, takeout and your phone bill. As you’re recording your expenses, you could also organize them into categories, like “food,” “commuting” and “utilities,” to get an even better understanding of where your money is going and how you’re spending on your wants and needs.

Once you have all this information in one place, you’ll be able to compare your monthly expenses to your monthly income and make more informed decisions about how to allocate your money. You may find that you could dine out once or twice a month instead of every week or decide to look for free at-home gym classes online instead of paying for a gym membership. 

One other way to potentially create more room in your budget is to explore whether you could lower any of your loan payments. When you refinance your car loan, for example, you could get a new loan with a lower interest rate or a longer repayment period, which may give you smaller monthly payments.

Think about your financial goals

Now that you have more information about where your money is going each month, you may want to think about your goals. Are you looking to get on top of your household bills? Pay off your debt sooner? Put more money toward a house down payment?

Being honest with yourself about your habits around money and being realistic about what you might be able to spend and save could help you achieve your financial goals in the long run.

Try new budgeting methods

Different budgeting methods work better for different people. Here are three popular methods you could consider trying if your budgeting strategy could benefit from a refresh:

·   50-30-20 method: With this method, you spend 50% of your monthly income on your needs (rent, utilities, groceries), 30% on your wants (dining out and streaming services) and 20% on your savings. You could tweak these percentages slightly depending on your financial situation.

·   Zero-based method: Assign a role to every dollar of your monthly take-home pay until you get to zero.  Zero-based budgeting is a flexible approach if your expenses fluctuate month-to-month.

·   Envelope method: At the beginning of each month, put cash in the amount you’re budgeting for smaller monthly expenses, such as entertainment, groceries and coffee with friends, into marked envelopes. The amount in the envelope is how much you may spend in that category for the entire month. The envelope method is helpful if you’re prone to overspending or tempted to borrow from one category to use for another.

Develop new habits around money

Sometimes, regaining control of your budget comes down to using creative hacks or workarounds when it comes to spending and saving. Here are some ideas:

·       Buy used: If you love shopping for clothes or interior decor, why not explore thrift or consignment stories in your area or online? Challenge yourself not to buy anything new for one month and see if it helps you cut down on impulse purchases.

·       Stick to a meal plan: Before you go grocery shopping, create a rough meal plan and grocery list for the week so that you know exactly what you need to buy and can make sure it fits within your grocery budget. Making time to do some meal prep in advance could help you avoid spending money on takeout, too.

·       Automate your savings: Setting up direct deposits from your checking to your savings account every month could make it easier for you to save without thinking about it.

Look for extra work

You could also consider looking for extra part-time, freelance or gig work to pad your monthly budget. Think about what kind of work you might enjoy doing, even if it’s only a few hours per week — providing music lessons, delivering groceries, designing websites or helping people organize their homes are all possibilities. 

Take small steps to better your budget

Taking control of your budget may feel overwhelming, especially if you don’t know where to start. A few simple steps could help you get back on track, including carefully reviewing your expenses, thinking about your financial goals, trying new budgeting methods, developing new spending habits and looking for extra work.

Approaching your monthly budget in new ways could help you set yourself and your finances up for a more secure future.

Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of yourhealthmagazine.net or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.