The expert offers top tips for creating a budget and saving money every payday

Experts shared their best tips for learning to budget every payday. For many people, knowing what to do with their money once they have it can be a struggle, leaving them living paycheck to paycheck with little or no savings.

Online lender CreditNinja we’ve shared top tips for budgeting your salary, giving you some peace of mind and helping you take control of your finances. A budget is a simple way to do this.

A budget is a detailed plan for your income and expenses – the most basic budgets have categories for income, essential expenses, recreational expenses and savings, but can be completely customized according to your habits and lifestyle.

Budgets are a useful tool for managing money if you’re honest about your spending habits and commit to your goals. Coming up with a realistic and manageable budget can help you pay off debt, deal with financial emergencies, curb bad money habits, and achieve your personal life goals.

How to create your budget

Creating a budget, especially if it’s your first time, can be overwhelming. To help, the process has been broken down into smaller steps – here’s what you should do.

• Identify your financial goals and consider what you want to achieve, whether it’s a short-term goal like saving for a vacation or a long-term goal like building an emergency savings fund.
• Set personalized goals – this will give you a reason to save and make it easier to stick to your budget.
• Calculate your income and make sure you include all forms of income, not just salary. This can be a little more difficult for hourly workers, as the figure can fluctuate, meaning you’ll need to adjust your budget each time you get paid.
• Remember, budgets are fluid and will change based on your situation for the month; this is not a disadvantage and adapting when necessary will help you stick to your goals.
• List all expenses and prioritize them – be honest about what you spend; it’s always better to overestimate slightly if you’re not sure. This includes rent, groceries, and even the cup of coffee you get every morning on your way to work. Prioritizing your expenses allows you to determine what you need to focus on and discover unnecessary expenses to eliminate.
• Allocate your funds and divide your income between expenses, focusing on your priorities, then divide what’s left into savings or investments. Anything is better than nothing, and it will become easier to know what you can comfortably save as you progress on your budgeting journey.
• Track your spending to make sure you stick to your budget. Reviewing your finances at the end of the month and comparing them to your budget is a great way to see where you stayed on track and what areas need adjusting next time.

Budgeting strategies

If you need a little more guidance, there are different strategies you can use to help you achieve your goals.

The 50/30/20 method

One of the most popular strategies is the 50/30/20 method. This involves spending 50% of your income on essentials, 30% on recreation and 20% on savings.

This can be a rough guide to how much you should put in each category, but keep in mind that it may not work for everyone. For example, the essentials could be more than 50% of your income. Play around with the numbers to find a split that works for you.

Cash filling

Cash stuffing or envelope budgeting has grown in popularity, mainly thanks to TikTok. This method can be done physically or virtually, and the basic premise involves envelopes or pockets labeled with different categories of expenses, such as rent, beauty or savings.

You put your budgeted money into these pockets each month, and once the money is spent, you can’t spend more. Doing this physically with cash can help you visualize your money and get a better picture of how much you’re spending.

Budgeting tools

Using budgeting tools or apps is another effective way to help. Budgeting spreadsheets are available online, both free and paid; simply enter your income and expenses and the spreadsheet will do the rest for you. Budgeting apps can also be useful with the option of automation, where money is taken from your account weekly or monthly, depending on what you can afford to save.