10 Absolute Ways To Simplify Your Budget

“The ability to simplify means to eliminate the unnecessary so that the necessary may speak” ~ Hans Hofmann

Written by Kevin Tyler Smith. You can follow me on Twitter or Facebook

Developing the attitude of frugal spending and cultivating the habit of budgeting only for necessary needs is an honorable practice.

However many people struggle with the concept of allocating funds.

Whether this struggle with budgeting is due to negligence, discipline or simply, lack of knowledge, this habit need not be mysteriously cumbersome.

With the institution of a smart budgeting system for your personal finances, you will ultimately discover a boost in your savings anywhere between 50% and 100%.

Learning to live beneath your means and simplifying to minimal is a topic for another day. Until then, here are some tried and proven tips on how you can simplify the process of keeping your budget and finances tidy.

Write It Down

1. Make records. It is vital that you write down your entire budget so you can have a wide overview of the entire situation. You can avoid unnecessary or early spending by writing down the details and the due dates. You can also see if some of your past and future purchases are really worth it. You can save more by identifying the needs from the wants.

2. Organize by day. Make a list of your daily budget. This will include some of your basic needs like fare, food and snacks. You should consider your activities for the day then determine when you are supposed to spend on something and how much you intend to spend.

Organize by Period

3. The weekly budget. Arrange your budget and simplify it by week. Include all the details that you do on a weekly basis like buying groceries, buying dog food, your weekend massage, car wash or fuel costs to visit family. Make the necessary arrangements so that you can stick to the budget and avoid making repeat purchases.

4. The monthly budget. Organize the budget by the month. Include the needed details that you do every month like paying rent, buying clothes, buying foods that last you a whole month or more, etc. It is very important that you consider these in line with your weekly budget. Doing so will serve as a good barometer of how much you are spending.

By Category

5. Setting the categories. Divide your budget costs according to the type like budget for food, budget for the computer, budget for other people in the house, grocery budget, electricity and water bills, etc. You can then check and see which of these need to be paid immediately and which ones can wait for another month or so. The categories will also help you see how much you are actually spending per month.

The Needs and Wants

6. Differentiate. Categorize your budget according to your needs and mere wants. You should ensure that you always have a prepared budget for your needs and priorities. The wants can be postponed until you have extra cash or until you really need it. Some examples of needs are your monthly rent, utility bills, clothes, transportation costs and food. Examples of wants are a new pair of shoes, a gym membership and several other things that you can still live comfortably without.

By Percentage

7. Reducing debt. You can reduce your debt and payables significantly by preparing everything according to percentage. View your monthly and weekly expenses then divide everything accordingly. Try to allocate about 50 to 60 percent of your budget for buying needs like food, rent, insurance, transportation and clothes. 10 percent should go straight into your retirement investment, 10 percent should go to your current savings and another 10 percent for buying some luxuries. 10 percent may also be saved up for emergency purposes and long term savings.

8. Ways of paying. You can adjust your budget according to your method of payment. For example, separate payments that should be paid for online, then separate payments that should be paid for using credit cards. There should also be a percentage allocated to be paid for in cash.

By Account

9. People to pay. Prepare your budget according to the account as well. This means dividing and setting up the payments based on the person or company you need to pay.

10. The due dates. Set up the budget based on the due date so that you can avoid missed and overdue payments. You can fix the payments and set your future purchases very well so that you will have enough time to pay for all of them.

Now it’s time to implement……You have every reason in the world to do so.

____________

Enjoy this article?, get Promethean updates straight to your inbox.  Also, please “share this” with your friends on Facebook, Stumbleupon, Digg, etc. and “tweet” to your followers on Twitter. They will love you for empowering them.

P.S. If you tried to make money online and failed, this will be the most important message you ever hear

*photo credit: chigmaroff