It is bit hectic and frustrating when at the end of the month you are all broke and you don’t have enough money. Your improper expenditure not only affects your monthly budget but also hinders to achieve your long term financial goals.
Here are few painless tips to save money:
Divide and Rule – When it comes to save your money then you follow a golden ratio to divide your monthly net income i.e. 5:3:2. This is not something new; many people use this ratio for saving their money and spend in decent ways. In the ratio 5parts are for your necessities and 3 parts are for your basic needs while the rest 2 parts are for your savings. For instance, if you are monthly net income is $10,000 which excludes your monthly tax amount. Then, you have to divide the income in the ratio of 5:3:2 which is $5000 dollar to spend on your necessities like food, cloth, etc. $3000 dollars to spend on your entertainment, trips, etc and rest of the $2000 will be your savings which you can either saving as liquid amount or invest it to grow. If you have any debts or loan premiums to pay then you can pay it from the savings part of your income.
Keep records of your expenses –Another easy way to limit your expenses without causing any pain to your brain because of the restrictions you feel by cutting the expenditures is to make records. By keeping a track on all your expenses you will know how much amount you are spending and where you are spending it. Don’t forget to mention each and every penny you spend because when you will combine all those little expense they will make a big difference in your budget.This works in psychological way as when you will review your expenses every while you will know if there is anything that you are spending irrelevantly on then you won’t repeat it again. Also, this will help you in keeping on track that how much you have already spend from your budget and how much you are left with.