As CNN Money reported in January 2017, only 41 per cent of adults in America have sufficient savings to cover a surprise expense of between $500 and $1,000. This is a surprisingly low figure. If you are one of those people who finds it difficult to save, you may need to look at your budgeting skills.
Budgeting is something that many people dread even thinking about. If you are already juggling work and kids, while also trying to have a social life, you may well resent spending valuable time sitting down and working out the household finances. But, you will be glad you made the effort when the air conditioning breaks down and you need to find the money to get it repaired. Being able to dip into savings at times like this can be a relief. The only way to build up savings, is to budget wisely and well.
Keep track of what you spend
This is a good starting place, if you want to start budgeting more effectively. There are several useful apps that can help you keep track of what you spend.
You can also create your own Excel spreadsheet, or simply use a pencil and paper. The most important thing is to make sure that the figures are correct. Once you know what you are currently spending, you can create a budget which can help you spend wisely; and maybe allocate less money to that non-essential expenditure, which can get out of hand.
Make sure your budget is realistic
Essential expenses, such as bills, always need to be covered. You also need to factor in the cost of food and groceries. Try to cut down on the amount you spend on non-essential items, such as meals out. But, do not reduce this expenditure so much that you are unlikely to stick to the budget. Remember to include an amount for regular savings.
If you do not already have a savings account, or you are unhappy with the one you have, take a look at honestlynow.com to find a local financial institution that may provide you with a better savings solution.
Revisit your budget on a regular basis
Circumstances change over time. You may have another child, or one of your kids may leave to go to college. Changes like these alter the amount of money that is spent on items such as groceries. Even if there are no obvious changes, you may find that you simply stop buying certain things. Therefore, you should re-visit your budget regularly, and re-allocate funds, if necessary.
Budgeting is quite a simple process, once you get started. Having a well-planned budget in place increases financial awareness. Once you have created a budget for your household, you will become more dedicated to making best use of your resources. For instance, you will probably write a list before you go shopping, instead of just randomly wandering down the aisles and seeing what catches your eye. This change in focus should help you become one of the 41 per cent of Americans who do have savings for a surprise expense.