Whether you want to buy your first car or your first home, saving enough to pay for your down-payment can be tricky! SkyCap Financial is one of Canada’s top personal lenders and they want to share insights on how to budget and manage your credit. Believing that smart money management is essential, recently SkyCap Financial created SkyCap University, a program designed to teach financial literacy in a fun, engaging (and rewarding!) way.
Not sure how to begin your budgeting strategy?
Here are some budgeting thoughts from the lending experts at SkyCap Financial:
- Ins and Outs
The first step to budgeting is assessing how much money you have coming in and how much money you have going out. Your income will determine how much you can spend, and where you need to loosen or tighten the purse strings.
After getting to know your income limitations and assessing your bills, you can set-up a payment schedule that lines up with your pay days and bill due dates. It may be helpful to set up auto-pay for essential expenses such as heating and electricity.
- Stick to the essentials
Deciding on essential parts of your monthly spending schedule can be difficult to determine. By categorizing your ‘wants’ and separating them from your ‘needs’, you can simplify your budgeting into two categories.
Your essential meals, for example, can be redirected to home made meals instead of purchased meals. Big purchases, such as a new car, can be re-evaluated before making a large purchase. For example, you can find ways to reduce overspending by asking whether you ‘need’ a new car or ‘want’ a new car. Instead, find compromises that allow you to stick within your budget, by saving a few dollars every pay period to go towards a ‘new car fund’.
- Moderation is key
Don’t worry, you don’t have to sacrifice your morning bagel!
With proper budgeting, you can schedule morning coffees and budget meals into your spending schedule. Your plan can incorporate a spending strategy that includes rewards for saving!
For example, set out an allotted amount of money for your miscellaneous spending within a certain time period. For time periods with no spending on miscellaneous items, you can reward yourself by carrying over that saved money to contribute to the next period’s miscellaneous allotment.
- Trim your spending
To support your saving strategy, it always helps to look for ways to trim your spending. By being an active consumer, you can reduce unnecessary spending by being aware of products with comparable use, value and quality. For example, instead of buying brand name, stick to supermarket brand goods with comparable quality at lower prices
- Keep track over the long term
Keeping on top of your finances is the most important part of budgeting, and keeping up a savings schedule requires long term maintenance. Whether you are looking to improve your credit or are recovering from a past bankruptcy, keeping track of your financial goals over the long term can help you plan for your future.
These five tips will help you in organizing your budget and help you save!