Life is full of surprises, some good and some bad. When you live paycheck to paycheck there isn’t any wiggle room for an unpleasant surprise such as a needed home or vehicle repair. You also tend to leave out important tasks such as protecting your personal information from harm.
Additionally, the pricing of bills varies from month to month. For instance, during the summer and winter months electric and gas bills will be higher than during the spring and fall. You may also have a lot of company over holidays which can add hundreds to your normal grocery bill. These are just a few of the reasons it’s important to have a household budget.
Coming Up Short
It’s not uncommon for someone without a budget in place to come up short with money on their bills or for a needed repair. Unfortunately, the paycheck to paycheck lifestyle generally brings late payments and a less than desirable credit score. Because of this, getting a small loan through a traditional bank may not provide positive results.
Luckily, there are other places you can turn to in your time of need such as a Western Shamrock installment loan.
While they do have requirements like a steady job, a checking account and the ability to repay, they don’t solely base their decision on your credit score. If you prefer not to take out a loan, then you can ask a family member for a small loan or have a garage sale and sell off things of value you no longer need.
How to Set Up a Budget
The good news is that anyone at any time can establish a budget. There are numerous sites online that offer free budgeting sheets that you can download and then print out so that you retain a hard copy. Use the sheet to add all of your outstanding debt like a mortgage, a car loan, a student loan, credit cards and other loans. Then list your utilities, cell phone, and cable monthly bills.
Lastly, factor in how much you spend on things like groceries, personal care products, clothing, gas, and daycare.
Once you have the list complete you’ll get a true accounting of how much money you need each month to pay your obligations and live. Then take your net monthly income and deduct your expenses. With the money remaining, you can do several things. Take a percentage and start paying down debt and another percentage of it to open a savings account. The amount left over is yours to enjoy for a dinner and a movie once a month or something you want to buy.
What a Budget Does
First, a budget keeps you steady, on an even road. It’s like using an iron over a large pile in the middle and smoothing it out flat. It allows you to afford the months with higher electric and gas bills by combining all the funds over the course of a year.
A budget also lets you pay down debt slowly and helps you to avoid unnecessary and costly over the limit and late fees. Plus, it ensures that you pay your bills on time. This helps to continuously improve your credit score and lets you get the best rates possible on a new loan.
Having and sticking to a budget initially may hinder you from making purchases or eating out. However, in just a short period of time, you’ll see that your checking account is not negative, that your bills are paid and that your savings are growing.