January 4, 2022
Budgeting for singles can be very challenging for one reason and the other, but the fact is that you cannot manage your expenses without budgeting. You may think that you do not create a budget to meet your expenses because you can easily manage to avoid overspending.
However, the fact is that this sort of attitude causes several monetary problems down the road. You could be right to some extent that you do not need budgeting to manage your expenses, but what about unforeseen expenses?
Financial emergencies can pop up any time, and you may need a lot of money. That time you may have cash insufficiency. You can decide to take out a bad credit cash loan, but do not forget that soon you will have to pay the whole amount along the interest.
Of course, debt payment is also an additional expense, and you will have difficulty paying it off. As a result, you will end up rolling over the loan and eventually fall into a debt trap.
This is why it is crucial to have a budget. Budgeting can help you analyse your spending as well as build an emergency cushion.
Tips for budgeting for the single
Here are the tips that you can follow to make a budget.
1. Analyse your spending
The first thing that you need to do to create a budget is to analyse your spending. You must know how much money you need every month to spend. Take a paper and pen and jot down how much is coming in and how much is going out and where.
You can take a look at your bank statement to see how much money you need to spend on things you want every month. Once you have got to know how much money you need every month to spend, you can set aside what you are left with.
However, the purpose of knowing your regular expenses is that you should cut back on them, so you can save more money. For instance, if you have found that you need 80% of your income for your monthly expenses, you should set aside 20%.
As soon as you receive your paycheque, you should immediately transfer 20% of your income to the savings account. Make sure that you stick to set aside this portion so you keep increasing your emergency cushion.
2. Track your expenses
You should be careful about your expenses if you want to make your budget successful. It is crucial to track your expenses if you want to make a budget work for you. You should make a spreadsheet and note down everyday expenses.
Make sure that you have properly written everything from the money you spent and the item on which you spent the money. By tracking your expenses, you will be able to prevent overspending. Note that overspending is the biggest cause for falling off a budget.
If you cannot do it manually, you should use a budgeting app. There are some budgeting apps that you can use to monitor your expenses. These apps can help you track your expenses in a better way. You can get an immediate alert as you come closer to your spending limit.
Some budgeting apps can also help you with investing money. However, before you use those apps, you should learn to take control of your spending.
3. Save for long-term planned expenses.
Even though you are able to successfully manage to set aside money for financial emergencies, you cannot sit back. Do not forget about long-term expenses. You know very well that you will need money for your long-term expenses.
You will likely need a car or buy a house. Even though you will finance them, you know that you need to arrange down payment. For instance, if you decide to buy a car in the coming years, you will need car finance in Ireland, but you will need a down payment.
You must need at least 10% of the total cost of the car as a down payment. You will have to start saving money now if you want to have sufficient funds as a down payment. You should leave some scope in your budget, so you do not struggle down the line.
4. Stop using your credit card.
If you want to stay on top of your expenses, you should pay with cash. If you do not have a habit of keeping a wallet with you, develop it. When you make purchases through credit cards, you end up overspending money.
You do not realise your buying capacity, and you keep buying things you come across on the market. At the time of paying off your balance, you eventually find that you do not have enough cash to pay it off.
If you fail to pay off the balance within the grace period, you will naturally end up paying very high interest on the outstanding amount, and this can shatter your budget. This is why it is recommended not to use your credit card all the time.
The bottom line
If you are single, it can be hard for you to make a budget, but it is not impossible too. You should use the tips mentioned above, so you can manage your expenses in a smarter way. You should never underestimate the importance of budgeting; otherwise you will face financial problems down the line.