How to Balance Your Budget in Tough Times

Sometimes, tough times require tough measures. If you find yourself struggling these days to balance your budget, there are some things you can do to put your mind and wallet at ease. If you’re not an organized person, there’s no time like the present to start. Taking control of your expenses and knowing where you stand financially is the first step to better financial health and peace of mind.

The first thing to ask yourself is, do you actually have a budget, or are you just winging it every month without a set plan in place? If you answered yes to the latter, you’ll need to create a list of expenses on a monthly basis so you can refine your spending versus income. The first thing on your list should be recurring monthly bills such as mortgage or rent, utilities, internet service, credit cards, etc. Add up the total and deduct it from your total monthly income.

Next, list all of your flexible expenses which can vary from week to week, such as groceries, gas, take-out meals, and so on. Take the average of the past three months and use that as your budget total, although you can leave a little wiggle room for flexibility. You should be able to determine approximately what you’ll need based upon the average of the previous months.

The next step is to determine what you might need to set aside for unexpected expenses such as home or car repairs. Put that into a separate account. If you don’t end up needing it in any given month, you’ve got yourself a nice savings account started. Try to put that flex money into the account every month. If something unexpected comes up, this will help to avoid panicking because you know you have something set aside for such instances.

Another thing to consider when spending your hard-earned money is to truly think about the purchase and ask yourself if you really need it, or if it’s an impulse buy out of desire or falling for a convincing infomercial! Yes, those ads can make anything sound great! Try not to be tempted if it’s something you actually don’t need. That’s where you can end up spending money you either couldn’t afford to, or didn’t really need to. If you see something you think you might like to buy, either make a note of it, or keep it in your shopping cart for a while until the impulse passes. Then go back and review to see if you still think you need it, or just fell into the desire trap because it looked great. You may be surprised how your thinking can change and therefore save money in the process.

Lastly, the key to getting through anything is perseverance. Don’t give up. If you’re not great at budgeting, there are plenty of apps out there to help you manage your finances. Once you’re in control, you’ll have the confidence in knowing you have a realistic basic plan and can build on it from there.