Ways To Plug Up Holes In Your Budget

If you're having trouble learning how to budget money then that means you probably have a lot of budget leaks that you let get away from you. If you're a victim of a budget full of holes then here's some ways you can help plug up that money leak!

Figure Out Where Your Money Is Going!

Step number one is to analyze your budget. If you've already evaluated how much money you make and are still coming up short then it's time to fix that budget! A lot of people are "here and there spenders". Even though they've carefully allotted for their everyday expenses like rent and electricity they still can't keep money in the bank.

This is most likely due to little impulse purchases that you make and don't even realize. Many people blame this on debit cards, because you don't know exactly how much money you have in your pocket and are free to 'over spend'. Many people keep their "spending money" in cash and once that's gone they don't spend anymore. I've found this to be the opposite with me though as a debit card leaves a nice record of my purchases to actually see where my money has gone. I can go back and see how much I spent on gas, food, clothes, or things I didn't need. Cash seems to disappear without a trace for me, because I can't recall where I "left it". Try both methods and see which works better for you!

You could also sign up for a service like Mint that analyzes your budget. It takes a while to train it, but once you do it will tell you exactly where your money is going month to month. Did you spend to much going out to eat? Are you doing a little too much shopping lately? You can pin point your exact problem and nip it in the bud. You can also get the big picture of your financial situation including debt, bills, and your spending habits. All of this can lead to a better you and a less stressful financial future.

Don't Let Yourself Spend It

If you find yourself coming up short on important bills then take that out of the equation before you even get your grimy little fingers on it! My mortgage, insurance, and taxes are all sent to separate accounts. I should really do it will all my bills and have them directly come out of the savings account, but sometimes it's hard for things like electricity because they aren't always the same every month.

However, my mortgage payment goes straight into another checking account. As a bonus my bank actually gave me a cheaper interest rate for having this payment directly taken out of my checking account! Win for both of us. Since taxes and insurance only get paid once a year I want to make sure I have enough at the end of the year. So, all of that goes into a Capital One Savings account.

You can do this either on your own by scheduling an automatic transfer or if you use direct deposit like I do you can usually get your paycheck split deposited into multiple accounts. That means the mortgage or rent can go right to your other account free from the temptation of you spending it on nonsense!

I also auto debit all of my bills to keep me on top of things and from forgetting. This may not work for you if you find yourself always running short at the end of the month. An auto debit could be a nasty surprise for you if you don't keep a cushion amount in the checking account balance. On the other hand this could help keep you from spending down to your last time. If you know bills could be pending you might be more apt to keep a certain amount in there just in case to avoid bank charges.

Keep Your Debt/Bills Under Control

If you're a buy now and pay later type of person you may be finding it hard to stop. Especially if that's combined with the attitude of spending your account to the last dime every month. This can be a very difficult cycle to break if you just plain don't have enough cash. Start by trying to build up a cushion in your account.

Start cutting small bills. A little off the phone bill, a little off the electric, and so on until you get enough to keep yourself from being in the red every month. If you have a lot of debt try to talk to your lender. They may help you out with a payment plan you can handle better. If you walk away they'll most likely get no money so some of them may be willing to help you out.

Make sure you don't pay down credit with credit. This is never good and just digs you in deeper. Try to find any other way you can. Even if that means a second job it could help you get out of trouble faster if you have a few hours a week you can spare.