Learning how to create – and follow – a healthy and realistic monthly budget can make all the difference when ensuring your short-term loans are being repaid in good standing. They can also help you to start planning for the next rainy day.
At Cash Today, we pride ourselves in our compassionate and understanding assistance that we give to our clients, year after year. Sometimes, we see a client only once, while in other cases, we have been able to contribute a great deal to both personal and business financial assistance while families and companies get on their feet following crisis or restructuring.
We strongly encourage that all our clients, regardless of where you are in life, or the purposes for which you have come to us for a short-term, no credit check, lending solution, take this opportunity to revisit existing spending budgets, or even make a new one if necessary. A regular, fresh look at your budget will help you to make a plan that will work for you, and work for your loan repayment.
Our 5 simple but important tips for creating and staying on track with your budget
1. Calculate your combined monthly income sources into a single program. While there are many budgeting apps out there to help you track, you can also rely on a well-structured Excel spreadsheet to do the trick. Regardless of what planner you use, you should have some very key pieces of your budget identified within it.
Recently, I sat with a young man to teach him about budgeting as he prepared for a time when he would move away from home. When asked to compile a budget, he simply made a list in a spread sheet, one line at a time, with no realistic concept of numbers, and omitting a lot of those little miscellaneous expenses that can creep up on us. We all know rent, power, internet, and our car payment. But what about tenant insurance? Vehicle insurance? Ever-rising gas prices?
And then how about those little automatic payments that are constantly eating away at our bank accounts and credit cards – some of which we don’t even notice any more? Netflix? Disney+? Google? What’s advertised as $9.99 a month, quickly becomes $100 a month if we just keep adding and adding.
Not to mention that addictive stop at Starbucks on the way to work every morning, costing you $50 every week (at least!).
So, take stock – what monies do you have coming in, and what is an accurate and complete accounting for every dime that goes out. Once you have that information, you can confidently begin building your spending budget with an eye to never missing a payment, or going over your credit card limit, and dealing with those pesky interest and NSF fees.
2. Make sure every dollar is accounted for. It’s called a zero-based budget and means that every dollar that comes into your bank account already belongs to something else.
This might sound discouraging, but really, if you assign every spare dollar to something, you can then begin to see how, when you spend money, it’s prioritized spending, even things like budgeted date nights, or Christmas shopping. It’s spending with a purpose, more than just mindless spending, where you’re terrified of extra money burning a hole in your pocket.
If your income exceeds your bills – excellent! (If it doesn’t, you may need to rethink Starbucks!) The ‘spare’ money that you have coming in, allocate it to a specific savings account (e.g. travel, Christmas road trip, birthday dinner at a fancy restaurant). You can hold onto cash, or you can invest in precious metals or other investment options. The idea is to make your hard-earned money work for you.
3. Set realistic budgeting goals. It may be that you don’t get that trip to Paris this year, or that fancy new motorcycle, or even that shoe shopping extravaganza… just yet. But what about wing night with the guys once a month?
When you make your budget, it’s important to be strict and disciplined, however you also have to remember that there will be little things that may come up from time to time that you would like to have a reasonable allowance for.
For example, in our family budget, we have what we call ‘funny money’. This is a $50 per person per week (because that’s what our budget affords for us – yours might be less or more) that we each get to spend on whatever we like. For him, it’s wing night with the guys. For her, it’s a mani-pedi once a month. But whatever you choose to spend your ‘funny money’ on, you can feel good knowing that the money was budgeted, and you don’t have to worry about it taking money away from something more vital, like fuel for your car, or a loan payment.
And feel free to save up this week’s funny money and put it towards something fun next week, like a fun date night together, or let it sit there and put it towards a credit card if you have nothing pressing to spend it on that week.
Another tip for ensuring you stick to your funny money allowance, pull cash out of the bank and leave your debit cards at home. You can’t spend it if you don’t have it on you!
4. Pay off your debt. Whether you owe taxes to the government, a credit card, your title loan, or your parents – pay off your debt. It is wise to pay off circulating debt with the most interest accumulating first (like credit cards, or over drafts), since that extra interest is actually money saved if you pay those of quickly.
If you run credit cards of approximately $40,000, do you realize that you are spending about $1500 every month in interest? That’s $18,000 every year. That’s a new car every year in interest payments! What would your budget look like (or your savings!) if you were not paying interest every month?
It’s quite common for people to have large amounts of debt sitting on their credit cards, living off the minimum payments, and feeling like you’re in a vicious cycle. But, if you start with the smallest balance, and put as much money as you can onto it every month, you would be surprised at how quickly you can get rid of that debt.
Once the credit card debt is gone, close the card, or stash it in a lock box, removing the number from every app on your phone, including Amazon and Skip the Dishes. Those pesky at-the-tip-of-your-fingers apps have gotten a lot of people in trouble, spending way more than they need to every month, especially on interest.
5. And finally, review your budget regularly, celebrating any wins you have! Life happens. And sometimes, we need a few more groceries this month than we did last month, and we need to adjust our budget accordingly (since after all, the money doesn’t usually change – just how we spend it).
By staying on top of your budget, reviewing it regularly, you can continue to motivate yourself why you are working so hard – so that you may pay off a credit card this month and save that money next month for the next card.
You can also celebrate wins – if you make it all the way through the month and everyone stayed on (or under) their budget, you could choose to have a little set aside for a pizza night at home, or a road trip to the mountains to celebrate the win.
However you choose to acknowledge successes in budgeting, they are important to acknowledge. For those of us for whom budgeting doesn’t come easy, I’m here to encourage you that you can learn, and you can stick to it!
And remember – if you every find yourself stuck, and in need of a little extra un-budgeted for support, reach out to us. Our short-term, no credit check loans make be just the thing you need to get you from point A to point B in a tough time.