Tuning Up Your Budget

Remember back in January when I explained how to make a budget from scratch? No? Here is that post, and in it, I said we’d need to revisit your budget and tweak it. Here are a few ideas to get you started on making adjustments.

Did Your Income Increase?

The first reason you might need to change your budget is a dramatic increase in your income. If you have received a significant pay raise, the smart way to handle it is to allocate it 50/50 to debt and then to savings. Since you have been living on a lesser amount, this won’t hurt. As debts go down, your monthly discretionary money will increase.

Loss of Income

This is the second reason you might need to adjust your budget. If you changed jobs, moved to a higher cost-of-living area, or if bonuses have slowed down at work, you will need to make some adjustments. The first one is to curb spending, try eating out less often, or cut back on your clothing purchases. This is also the time to stop using credit cards and possibly slow down on savings plans until your income rebounds.

No Income Changes

If your income hasn’t changed, but the budget isn’t working well for you, then there are some different adjustments you’ll need to make. If you feel like you are keeping within the numbers you set up initially, it’s time to challenge yourself to some goals. Try allocating more to savings for a few months and see how that affects you. If you are comfortable with that change, add a little more to your debt pay down plan. Each little change will have big payoffs in the future thanks to compounding. Compound interest can work against you on debt, and for you in savings & investing. Money market accounts are a great way to invest some extra cash, and Credit Donkey has compiled a comprehensive list of some of the best rates for various banks.

Use BillCutterz

While we can’t work up a budget for you, we can help you save money. That’s all we do at BillCutterz. It only takes a few minutes to sign up and we’ll do our best to put money right back in your pocket by reducing monthly bills for you.