Many people are simply too busy or just do not know how to keep a proper budget, but it does not have to be as tricky as you think. Keeping a budget is one of the easiest ways to ensure that you do not overspend, and that you do not go into debt.
For some people, paying for things with cash is the easiest way for them to ensure that they are not spending what they do not already have. For others, paying by credit card is the best way for them to keep track because they can physically go online and see what they spend and on what. If you are not the type of person who finds it easy to overspend when using credit cards, then paying with a credit card is going to be the best option. Most, if not all, banking websites allow you to create your own monthly and annual budgets. All you have to do is log onto an online account and enter in a monetary amount for different categories, such as insurance, mortgage, groceries, shopping etc., and this then becomes your budget. As you use your credit card, the expenses will be automatically categorized and all you will have to do each month is log on to your account to see how much you have spent and whether you are staying within your budget. Many banks also offer credit cards with rewards programs, such as cash back or travel, which can mean that using your credit card instead of cash can save you money in the long run.
It is important when using credit cards to ensure that you pay the full balance at the end of each month, because if you only pay the minimum balance you will not only end up with a bad credit rating, but you will end up paying more in the long run in interest fees. Credit cards allow you to decide whether you would like to use them to save money, or to lose money.
For people who find the big credit limits that come with a credit card too tempting, then keeping a budget will be slightly more time consuming. If you pay for most things in cash then to keep a budget you will need to use an excel spreadsheet to create your own budget categories and set your own monetary limits. If you are a cash person, then it is important to ensure that you always keep your receipts because you will have to manually enter them into your spreadsheet each month, in order to keep track of your spending.
Keeping a budget is often an eye-opening experience for most people, as you will likely be surprised to see how much you spend on some purchases, and how some things really add up fast, like your two dollar morning coffee, which adds up to over 700 dollars a year. Seeing your yearly spending add up like that will likely cause you to change some of your habits, which can help you save thousands in the long run, and allow you to feel more financially at ease.