If you've resolved to get out of debt or save for a big purchase this year, you're likely just a little overwhelmed at the colossal goal in front of you. But here's good news: Chipping away at a financial target is really simple, at the heart of it, and boils down to this: Make tomorrow better than today.
How do you do that? Step one is to get familiar with these budget basics. Step two is to live them. Everyday.
Spend Less than You Earn
A simple concept, but seemingly so hard in practice for some of us. Add up what you make in a month, and then add up what you spend in a month (on bills, everyday expenses and anything else). If the second number is bigger than the first, you have to cut something (or many things) out. Haggle down the cable bill (or cancel it!) and skip your morning coffee habit until you bring that second figure down.
Pay Yourself First
You need to budget for saving; it should be a line item right next to rent or the electric bill. While you might be able to stash some pennies away with whatever's left at the end of the month, you'll see your savings really grow when you learn to pay yourself first before (or alongside) your other monthly expenses.
Don't Borrow From the Future
It might be a short-term thing ("I'm getting paid Friday, so I can splurge now.") or more long-lasting ("We'll probably be making more next year, so we can make this mortgage work"). But in either case, it's a bad habit that can lead to ruin. Learn to spend only what you have today, and it will save you in the long run.
What's your best budgeting advice?