Creating a budget can help you make the most of your money.
Budgeting is one of the key foundational concepts of personal finance, but knowing how to create one is still a mystery for many people. Budgeting is often viewed as the equivalent of financial deprivation. If made properly, however, a budget can help you achieve financial freedom. If you’re a budgeting beginner, learning how to create a monthly spending plan is the first step in getting your finances under control.
Determine how much money you’re making each month. You can’t successfully create a budget if you don’t know how much you’ve got coming in. You should create a list of all the income you receive each month from all sources, including pay from your job, money you make from a side gig or hobby, child or spousal support, interest income, etc. If your income varies throughout the year, it may be easier to use your average monthly income as a starting point.
Make a list of all your basic monthly expenses, including rent or mortgage payments, car payment, utilities, groceries, gas, pet care, insurance, etc. Now, compare your total basic expenses with your total monthly income. If your income is higher than your expenses, you’re already off to a good start. If your basic expenses exceed your income, go over each one carefully to determine how you can reduce your costs.
Write down everything you spend on a daily basis. Not knowing where your money is actually going can be a major budget buster, and tracking your spending helps you to identify areas where you can cut costs. If you’re just getting started with budgeting, it’s recommended that you track your spending for at least a month or two to establish your spending patterns.
Add up any and all debts, including mortgage loans, car loans, credit cards, student loans and medical bills. Next, add up the minimum payments for your debts and how much you’re actually paying each month. If you’re only making minimum payments on your debts, you should go over each of your basic expenses to see if you can cut spending. Once you find extra money in your budget, you can use it to repay your debts more quickly.
Set aside some portion of your income each pay period specifically for savings. Building up an emergency fund of cash can protect you in the event of an unexpected expense or a temporary loss of income. Ideally, you should have anywhere from six to eight months of expenses saved. If your newly created budget is still a little tight, start off with $10 or $20 per week and increase your savings as you eliminate your debts.
Items you will need
List of monthly expenses
Most recent pay stubs or income statements
List of debts
Pen and paper or budgeting software
Go over your budget regularly to look for areas where you can reduce spending.
Don’t forget to leave room in your budget for some inexpensive fun. Creating a budget that’s too strict will leave you feeling deprived, which may actually lead to overspending
Wherever you live, you only have a certain amount of space. A home’s size is predetermined by the architect who built it, while an apartment is designed specifically to fit a certain amount of units in a building.
While you may not be able to bust out a wall to make more room in your living space, you can still make it fit your needs. Don’t throw out your furniture pieces just yet. With a few easy tricks, you’ll soon feel like you’re living in the spacious home you desire.
Try these six tips for fooling the eye and making a room look more spacious. Even someone on the tightest budget can maximize the space in their home — or, at least, the appearance of it — and make it feel brand new.
1. Clean From Top to Bottom
The best thing you can do to create more space in your home is clean it from top to bottom. Take a day to empty every closet and shelf you’ve turned a blind eye to, and dig through the contents. Toss anything you don’t want to keep in a pile. Then, separate it later into one collection of items you can donate and one pile of things to throw out.
Once you clear your home of any unwanted or unnecessary things, you’ll automatically gain more space to work with. Then you can move on to the fun stuff, like redecorating and playing with the way you set up each room.
2. Work With Mirrors
The first tip any interior designer will give you to open up a room is to hang mirrors. While you don’t need to cover the walls with mirrors from top to bottom, you’ll need more than a couple of mirrors hanging here and there to do the job.
Instead, hang mirrors strategically as decor and make each room feel bigger. Use them to create a visual window rather than constructing an actual windowpane. Play around with different sizes to determine what works for you. Consider the space, color and design of each mirror you choose.
3. Combine Lighting and Paint
When you need to work with an especially small space, lighting and paint color play a vital role. Natural light fills a living area and brightens every corner, making it appear larger. The right color paint will emphasize this trick of the eye. So, where can you start?
The first step to approaching paint is to match it with your floors to get the shade that works best in each room. Light floors and light paint will visually open up a space more than if you matched dark paint with light floors. Ask for paint samples at your local hardware store to try out swatches and figure out what you like before committing to painting the whole room.
4. Hang Curtains Higher
When you picture an expensive home with extra spacious rooms, you might imagine tall windows with extra tall curtains. While your home’s curtains probably fit the size of your windows, think about switching them out for longer shades to achieve this look. Hang the curtains four to five inches above the top of each window to maximize its size and play a visual trick with the room.
5. Invest in Tall Furniture
People with large homes often have taller furniture made specifically for each room. Even if you can’t do the same, you can still invest in tall furniture that fits the height of any area of your home. Find tall furniture that looks like it belongs in your space, such as a bookshelf painted your favorite color.
Bookshelves are one of the best pieces of furniture you can find to create a bigger room. Look around thrift stores in your area for bookshelves on sale, or consider building one yourself using your room’s exact measurements. Line one wall with floor-to-ceiling bookshelves and leave some space on each shelf unfilled to create the appearance of a larger room with more space.
6. Buy Large Rugs
Homeowners commonly use rugs to create a focal point in a room. The right rug blends seamlessly into any design scheme — and if you’re trying to create more visual space, you’ll want to go big or go home. Larger rugs cover more of the floor and create the illusion of a larger room. On the other hand, having multiple small rugs in one room shrinks each section and minimizes the entire space.
Large rugs are worth saving up for. As soon as you unroll your new addition, you’ll immediately see a change in how you perceive the room.
Stick to Tiny Changes
When you think about making a room bigger, you might immediately picture expensive renovation and weeks of contractors moving in and out of your home. Instead, you can avoid the headache of a large project and create the same effect with tiny changes.
Buy a lighter paint color and redo your home to expand every room. Build tall furniture or roll out an oversized rug while you’ve got free time on the weekend. Little efforts make a huge difference in changing your home from feeling like a cramped space to one with room to breathe.