INSIDE COSTCO // SERVICES
Checks on budget
lying by the seat of your pants, financially,
and thinking it might be time to put yourself
on a budget? Costco service provider
Harland Clarke has five simple rules to help
you put a budget together and stick to it.
1. Distinguish between needs and wants. A
newly created budget can be derailed by failing to
keep wants separate from needs. Needs are food,
clothing, shelter, insurance, gasoline and rent or
mortgage payments. These should be the first things
that any budget addresses.
2. Include all expenses. Many budgets track
only month-to-month expenses. This is a big mistake. Plenty of expenses do not appear on a monthly
basis, such as car or house repairs. Those expenses
can show up without warning. Take into account all
the expenses that will appear over the course of a
year. Total them up and use that figure to calculate
monthly savings goals. This way the budget will
include all needed expenditures.
3. Stay within the budget limits. There is no
point in setting up a budget if you don’t follow the
limits. Keeping track of all expenses, down to the last
penny, is the key to building a good financial future.
Splurging on new items without first budgeting for
them is a recipe for two things: debt and disaster.
Five simple rules to help
get your finances on track
4. Allow room for entertainment. Entertainment
may seem like an unnecessary expense. However,
everyone needs some time off for fun. Set aside
funds each month for entertainment once the basics
are covered. Renting movies or signing up for online
video streaming services are good ideas. Even better,
look for free things to do. Having fun makes sticking
to a budget a little easier.
5. Use cash or checks to manage spending.
Using credit cards can increase the risk of accidentally overspending. When this happens, stick to
using cash for a while until the excess debt is paid
off. Better yet, using checks makes you keep track of
your available balance. The psychological impact is
greater when you hand over physical cash or write a
check instead of reaching for a card. Watching your
money supply dwindle over the course of a week
drives home how much you really spend.
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