How To Budget For Today & Save For Tomorrow

By Cleveland Jernigan

While you might be tempted to simply say, "carpe diem," and spend your money as you earn it, this attitude won't be particularly helpful if you encounter some unexpected expenses such as major car repairs or medical expenses. Creating a workable budget can actually make your life more enjoyable rather than simply restricting your spending. Here are a few budgeting tips that will help you meet your current expenses and put a little money away for the future.

The first step in budgeting is to have a clear idea of your income, which is pretty simple to determine, as well as your expenses. The latter part is a bit trickier. While you obviously know how much you spend each month on some expenses, such as rent, insurance and your cell phone, you also need to determine how much you spend each month on cable, internet, cell phones, utilities, insurance, food, gasoline and all the other expenditures you make each month. Make a list of everything, and you should use all of your credit card statements and bank statements for reference.

Once you have all of your expenses listed, take a look at how much disposable income is left over. If it looks pretty scant, you might want to find ways to cut costs. Many people waste a great deal of money each year because they have credit card balances that aren't paid off each month. Interest rates on most credit cards are sky high, so you lose hundreds of dollars, if not more, each year, when you don't pay off those credit cards. Once you have them paid down, consider getting rid of most of them, and just keeping one card that has a reward system particularly suited to your needs. Even with this single card, limit your purchases and try to use cash whenever possible. That way you can only spend what you actually have. It's all too easy to charge now and think about the cost later.

There are so many other ways to cut your monthly expenses. Eating at home and packing a homemade lunch can help you save a great deal of money, and you can make this even more cost-effective by planning your meals and buying only the food you need rather than buying items on impulse. Other easy ways to cut expenses include taking a good look at your cable and cell phone costs and seeing if you can switch to a more cost-effective package. Bundling your internet, phone and cable also can be a way to reduce costs. You also can conserve your energy use and save some money there.

Once you cut expenses, you should have some extra money to set aside for the future. Planning for your retirement is essential, and it is wise to think about putting away at least 10 to 15 percent of your earnings. Many companies offer either a 401 (k) plan or an Investment Retirement Account or IRA, so consider having a portion of your income set aside in these accounts each month.

Another good option is to contact a financial advisor and look at creating a long-term financial portfolio. This might include retirement accounts as well as investments such as mutual funds, which typically provide a solid return with a fairly low risk of loss. Mutual funds invest money in a wide variety of stocks and bonds, diversifying your money so that it is a safer form of investment than just buying stock in one company.

About the Author:

Cleveland Jernigan enjoys blogging about investments. For further information about a Renminbi bond fund or to find out more about global energy funds, check out these fund websites today.