Budgeting: a Path to a Comfortable Life

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Life has twists and turns that can produce situations where you need extra money in order to cover an unexpected expense. People who have a budget in place simply draw money from their emergency fund or savings account to cover it.

However, if you don’t have a budget and live paycheck to paycheck, coming up with the additional monies can be nearly impossible. The good news is that you can establish a budget now and get your finances in order, and as a result, live a comfortable life. 

What a Budget Does

A budget isn’t simply a piece of paper with a bunch of numbers. It’s a representation of your current financial status. By writing down what you owe, you get a clear understanding of your outstanding debt and your spending habits. You also get a chance to see in undisputable terms what you make and what you have left in your bank account at the end of each month after all of your expenses. 

The Cost of Running Your Home

You need utilities in order to keep your home comfortable and functioning. However, with a renewed focus on spending, you can make changes in your usage to save money. For instance, if you run appliances like your dishwasher and washing machine later in the day, it costs less per hour. If you lower the setting on your hot water heater and keep your showers short, you’ll save money. And, if you replace standard light bulbs with high-efficiency LEDs, your power bill costs less over time. 

Avoiding Costly Repairs

Most unexpected costly repairs are avoidable. Regular maintenance of your home such as cleaning out the gutters, re-shingling the roof, insulating the pipes, and using a pest control service such as www.moxieservices.com, will all prevent the onset of a sudden disaster. The same holds true for your vehicle. Doing things like changing the oil, replacing the brakes, monitoring fluid levels and getting it serviced once a year will prevent a costly repair. 

Making More Money

If you currently have a lot of debt and your income doesn’t provide a way to effectively reduce it, bringing in additional money through a part-time job will help you achieve your goals. Thankfully, there are many ways to make money from the comfort of your home. Online businesses often need freelance writers, proofreaders, virtual bookkeepers and/or transcribers. You can also sell things on sites such as Etsy or Amazon. Or, if you prefer, use your teaching skills to tutor students or babysit for the neighbors. 

Getting Your Debt Under Control

There are two main reasons people get into debt: they either don’t make enough to support their lifestyle or they have bad spending habits. Regardless of what created your excessive debt, getting it under control is of the utmost importance. Luckily, you can do it. You can take out a personal loan or refinance your mortgage if you have equity and then use the money to pay off your car loans, student loans, and credit cards. If this is not an option, then you can start by paying off one credit card at a time, starting with the one that has the highest interest. It’s a slow process, however, a step in the right direction towards your goal of debt-free. 

Going Forward

Going forward it’s essential to make smart purchases and avoid giving in to frivolous spending. Paying attention to what you spend your money on, will enable you to spend less and keep more of your money. 

Budgeting helps you to follow the money trail. It opens your eyes to your debt and allows you to work towards paying it off. It also forces you to get your finances under control and learn how to save money. 

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