How to stop draining money? Together with the expert, we put the budget in order.
What will help tidy up the budget? And why can’t you just cut down on your spending? Together with financial consultant Anna Baburina, we figured out the subtleties of optimizing finances.
Do not forget to keep track of your finances.
It’s impossible to optimize the budget without keeping records, so fix all expenses and receipts of money. You can do this in a notebook, with the help of special applications or Excel.
We’ve already shared valuable services for keeping track of finances. Such planners will help organize your spending and tell you how to save and save for major purchases.
How to analyze the budget?
01- Keep track of your spending for three months.
That’s enough time to figure out how much money you’re spending and how you’re spending it. Examine your spending – you may discover a lot of exciting things.
02- Count your regular expenses.
First, determine your recurring expenses from month to month and how much money is spent on them. These might include transportation, communications, groceries, and utilities. Identify your most significant expenses and think about how you can reduce them.
03- Be aware of annual spending.
At the start, it’s not always obvious all of the expense items. These might include car insurance, preparing your child for school, or vacations. These expenses come up once a year, and there’s no way to pass them up. They can take you by surprise and create a hole in your budget. To avoid this, plan for them in advance.
04- Small expenses are the backbone of the budget.
Try to control small purchases from 100 to 500 rubles, like coffee or cabs. They seem insignificant during the day but turn into large sums at the end of the month.
How do I optimize my income?
You can go about optimizing your income – for example, by finding a better-paying job or part-time job.
Take a piece of paper, think about what intangibles you have, and write them out. Maybe you will discover a skill that you can monetize in the future.
You can also think about optimizing your investment portfolio or finding more attractive instruments to invest in. Don’t forget about benefits and tax deductions – they can also be used to supplement your budget!
How to optimize costs?
01- Limit your expenses
Allocate a specific limit of money for monthly spending and stay within that limit. Once you analyze your budget, you’ll know how much money you need. You can have a separate card for more control.
But be careful not to cut back on your spending to your detriment. Giving up all kinds of fun things can significantly reduce your quality of life.
02- Follow lists
Making lists before you go shopping can help you avoid impulse purchases. Try to shop once a week rather than making small purchases every day.
Generally, it’s better to shop at chain stores than at convenience stores. The choice is more excellent there. It will not be superfluous to keep track of promotional offers and discounts or use loyalty programs.
03- Don’t accumulate debts.
All of us have monthly obligations – paying utility bills or loans. Remember the consequences of falling into arrears and try to pay them off on time.
04- Plan your yearly expenses
You can get into the habit of planning them and avoid unnecessary loans or debts. To do this, calculate your annual expenses, divide them by twelve and put a small amount aside in a savings account every month.
05- Save on services
If you want to save money on utility bills, you can get Electricity, Water, Gas, and Heating meters.
You can also get better phone rates, look for free entertainment or buy things at bargain sales.
06- Be aware of intangible liabilities.
Intangible liabilities “eat up” your energy – and it’s in your best interest to try to reduce them. For example, you could hire a babysitter or use a cleaning service.
