5 Simple Ways to Prioritize your Income

After years of dealing with overspending and once again, being ill-prepared for any financial surprises, now is the time to go on a budget and take control of your finances.

Create a budget

Before you divvy up your income, track how much you spend for one week and evaluate the data. Then, you can custom create a budget framework that you are able to stick with because it is customized for your family to work with your lifestyle and financial goals.

Auto payments

Next, set up auto payments for all household expenses including mortgage, insurance, utilities, credit cards and car payments. To pay off your car or mortgage faster, set up payments every four weeks so that there is an extra payment made each year.

Savings

Another automatic payment should be set up-and that is a payment to yourself! Set up an automatic savings plan and with each paycheck, take 10% of the gross and automatically deposit this into your savings account. In ten months, you will have easily saved one paycheck’s worth of income and have made a good start in protecting yourself for that inevitable rainy day. In addition, you can even set up several separate savings plans and thumbnail them as subcategories. Some possible savings could include a travel savings plan, an education savings plan for yourself or your children, a home savings account, etc. This way, you can earmark money for a particular excursion or personal goal.

Learn to cook

Your food bill is the number one place to cut cost. Instead of spending money on convenience foods, learn how to cook food that you enjoy eating. Buy meats in bulk and divide them up into dinner sized portions and freeze them. In addition, for some meals, do not showcase meat, and instead, fill up on beans and vegetables. Take advantage of better prices of in-season fruits and vegetables at the local Farmer’s Market, or join a coop and fill the freezer. Learn how to bake bread and easily grow your own pots of herbs from seed.

Instead of going out to eat, make your splurge a bottle of high quality Italian or Greek olive oil or fine imported cheeses and really savor these specialities. Lastly, substitute. For example, instead of buying chips, buy inexpensive bags of popcorn and make it the old-fashioned way on the stove.

Pay off Your credit cards

Whether you pay off the biggest interest card, or the smallest total bill, start paying off your cards. If you have set up your auto payment feature for your credit card bills, you have already started. Now it is time to make the next step and focus on another card and make extra payments. Of course, you will not be using the credit cards until they are paid in full. Once they are paid, create rules as to when you can pull them out.

Written By Ryan Cooper