By Michael Hall
There are several ways to manage your budget wisely while awaiting a return to something like normalcy. Cutting costs can make getting through the current financial situation less stressful. Before you can do that, however, you first need to understand where and how you are spending.
Whether you have a budget in place or you belong to the 33% of Americans who don’t believe they need one, make a detailed list of everything you spend money on in a normal month. Start with your fixed expenses first. This includes everything you have to spend money on each month to maintain a basic standard of living, such as: Housing, Utilities, Food, and Insurance.
Debt repayment also could go on this list, since paying debts on time is critical for maintaining a good credit score. So if you have student loans, car loans or credit card debt, you’d add those here as well.
Make a second list of variable expenses, including discretionary spending. This list may include things such as: Clothing, Entertainment, Personal care or self-care, Dining out, and Shopping.
You also may want to make a third list if you have irregular expenses that you don’t pay every month. For example, these might include car insurance premiums you pay biannually or property taxes you pay on your home once a year. Factoring those expenses in means you’re not surprised once those bills come due.
The key is to put every expense in your budget into its own categories. Another way to think of it is like this: must-haves, need-to-haves and nice-to-haves.
Michael Hall is a financial counselor with Bedford Stuyvesant Restoration Corporation. As a financial counselor he helps individuals allocate their funds better, deal with debt, weigh in on legal options, and even save for a rainy day. If you’re in debt or have no credit and need help, a reputable credit counseling organization, like the Office of Financial Empowerment through NYC Office of Consumer Affairs might be able to help. To schedule a financial counseling appointment, go to: www.nyc.gov/talkmoney or call 718-636-6900 and ask for Michael Hall.