Family Finances

Freeing Up Room in the Budget

Photo by Sharon McCutcheon on Unsplash

We all wish we had a little extra money. You may want to do some home improvement projects, make a new purchase, or save up for a vacation. Whatever your reasons are for wanting extra money outside your normal expenses, you can take some steps to work towards your goals. 

Understand Your Finances

Before you can do anything else, you first need to understand your finances and where they are currently. This means sitting down and going over your budget. Start by making sure you know your net income as opposed to your gross income. If you are going off the income you make instead of what you bring home after taxes and insurance and retirement deductions, then your budget is not going to be balanced. 

Next, you want to make sure you account for all of your monthly expenses. You probably have a good handle on big payments towards your mortgage, cars, and insurance premiums, but there are other expenses that sometimes get overlooked.

Smaller expenses like groceries, gas money, entertainment, and monthly subscriptions may be totalling more than you realize. Go back through your bank statements and make sure what you are budgeting is actually what you are spending. It may be eye-opening to see some of the expenses you are missing. 

Once you have a handle on your budget and it is accurate, you are ready to start making your plans. Living by a budget helps you to see where your money is going and how much extra you have to work with after bills are paid. This helps you from going into unnecessary debt and make smarter money decisions. 

Credit Cards

If you are looking to infuse a little cash to your budget, then you can do so with credit cards. That’s right; I said credit cards! Most credit cards have rewards programs that you can take advantage of easily. 

It is important to be careful to pay off your credit card each month. It doesn’t make sense to put things on a credit card to earn points if you then have to pay interest on those purchases. 

It is important to look for a credit card that has a rewards program that fits your needs. Some offer cashback, which is great for some people. Others offer travel points for hotels or airfare, which is good if your goal is to travel. Some rewards programs will also offer extra points for different areas of spending, so find one that offers points for the areas you spend in the most. 

Eliminate Debt

Another way you can make it seem like you have more money in your budget is to pay off your debts early. Not having a monthly credit card payment can be a huge relief of stress both on your mind and your budget. 

You can also eliminate other larger debts earlier like car payments and mortgages. Paying these off earlier will free up extra money in your budget that you can then use for other things. You can eliminate debt by using the snowball method or the Debt to Success System, just make sure you are using the real thing and not a DTSS scam



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