Priorities and Purchases: How to Utilize Every Dollar in Your Monthly Budget

Here are some of the more fundamental strategies for how to make your money work for you for the new year.

One Size Doesn’t Fit All

Many people make the mistake of making a budget that’s supposed to fit every month of the year. This strategy doesn’t always work as seasonal expenses start to approach.

For example, winter time often means that your heating bills increase or you need to purchase presents for your family. Creating a budget that takes these items into account will help you to get a better handle on how you’re spending your money.

Tabulate Your Expenses

Some of your expenses will be more fixed in nature. As a part of budget planning, look at past expenses to get a better idea about these fixed costs.

For items such as your utility bills, you should have a rough idea about the amount of money that you need to set aside for them. Your first priority needs to be paying for those living expenses.

Creating a ledger and pulling these expenses out first gives you the flexibility that you need in your accounting to make your money go farther.

Make Smart Decisions

When you have extra money in your budget, you need to make smart decisions about where to put it. You should only buy things that are really important to you. For example, using your money for online chess lessons may be something that’s really important to you.

Once you’ve established these types of items as a priority, factor them into your fixed monthly costs. This will ensure that you aren’t overspending and will still be able to cover the rest of your expenses.

other valuable tips:

4 Different Types of Wallets to Help Organize Your Spending

Bad Spending Habits? How to Gain the Financial Self-Discipline You Need

Use a Zero Baseline

The idea of using a zero baseline budgeting system doesn’t mean that you spend all of your money. It simply means that your money has an assigned place to be utilized. This could include putting it into a savings account, paying for your monthly expenses, or for those extra purchases that are really important to you.

Another thing to be cautious about when employing this strategy is to ensure that you have a buffer in your checking account. An overdraft fee can cause your budget to go into a tailspin.

Utilizing every dollar in your budget often means that you need to make some hard choices. Use these techniques to help you decide what a priority is and what can wait.

Image Credit: utilize every dollar by Pixabay

end of post … please share it!

end of post idea for home improvement

view and analyze home improvement ideas at our LetsRenovate center