The old adage "money makes the world go Ďround" has never been truer than it is today. It costs money to do anything nowadays and things cost a lot. Just go to the movies or grab some lunch with the family and see how much it sets you back.
Or grocery shopping, letís not even go there. Whereís the fun in life when youíre just paying your bills and not looking forward to that holiday at the end of the year, or spoiling yourself just because? That is why budgeting is so important.
Let me say first I am not by any means rich, but I am 20 years old, a full time student, part time retail worker, paying rent and all of those pesky bills that happen when you become a responsible adult. So far I have managed to keep my head above water so Iíd like to share some tips with you.
Have three bank accounts. They donít cost you anything to open and have no fees if you find the right bank.
1. The first account is your savings account. This is the account you leave alone; once you put money in there it is not to be touched because it is a high interest account. If you leave the money alone and add to it every month, it will incur interest. You are making money just by having a bit of money sitting there. You can still transfer money out of it in emergencies but be aware you will lose interest if you withdraw funds from it.
2. The second account is your bills account; you can rename your accounts in your internet banking so you never get them confused. First thing on pay-day pay your bills. Rent, power, internet, gas, water, phone, the list goes on. If the bill hasn't come out, work out how many pays you have in between when the bill comes out and put money aside for that in the bills account each pay. An easy example is my phone bill. I am on a $69 monthly plan and I get paid fortnightly so each pay I put aside $34.50 for my phone bill. This is a bit harder for unpredictable things like your power bill but just estimate off the last one. Donít forget to budget for car registration, groceries and petrol. Aim to put ten per cent of your pay in to your savings account and you will be on your way to some tasty savings in no time!
3. Finally, the last account is your accessible account or your spending account. This is for your cups of coffee, magazines, movie tickets or even nice new shoes. Donít feel bad about spending because you are well on top of your saving and if you didn't spend it all before the next pay, put it in your savings or keep it in your spending if you're planning on buying some really nice shoes.
A final word of advice is to be thrifty. Hereís a few tips to get you started:
ē If you need new work shorts or youíre going to a themed party for example, check out your local charity store because chances are youíll find what you need there.
ē Shop around to do your groceries: go to a fruit store, a butcher and then your local grocery store because the prices will usually be a lot cheaper at the specialty stores.
ē Buy home brand because most of the time the products are exactly the same and just havenít spent the money on fancy packaging.
ē Re-use wrapping paper. When I buy my favourite magazines, instead of using the artsy poster inside I save that for wrapping paper, it looks great.
ē Use your workplace as a networking tool. Maybe that lady who sits across from you is a good seamstress who can mend your clothes in exchange for some home-made jam or whatever your specialty is. I took the old coffee jars home from our break room and use them as decorative storage containers.
Have 3 bank accounts, one for saving, one for bills and one for spending.
Donít forget to budget for things like car registration which come up once or twice a year.
Budget for bills that are going to come out in the future to ensure youíre always ahead.
Enjoy your left over spending money.
Be thrifty with your money, it could save you a lot.