Understanding personal finances might be complex if you are like the vast majority of individuals who live from paycheck to paycheck. It’s hard to save and manage your money when you don’t have enough to get by. But of course, that just means you should be all the wiser. And the first step in achieving your goal of financial freedom is to develop and stick to a budget. Then you can devise tactics to increase your revenue while decreasing your costs.

Be Good at Budgeting

You can’t make ends meet without being good at budgeting. That’s a simple truth. And here are simple but very effective tips to get you started.

Formulate a Budget: Needless to say, none of the tips here would be effective without a good budget. Fortunately, creating a way to track your own budget is relatively easy. In the first column of a spreadsheet, list the different sorts of costs you incur. In the rows, write the months of the year. Add a title line to the first line. Groceries and meals, transportation and mortgage, phone and internet, emergency health funds, interest payments, clothes should all be included in your budget. Make a budget for the next 12 months, at the very least. Add another line to your income and put your after-tax income. Include all family income and costs, especially if you are married. When purchasing food for numerous persons, economies of scale can be realized.

Don’t Spend Anything Until You’ve Budgeted for It: Begin by gathering receipts, credit card statements, and any financial statements in your name. Then, keep note of your spending for the previous month. Create a new category for any receipt that does not fall into an existing spending category. You must thoroughly understand where your money is going to make the most of your limited budget. Install an expense tracking app on your smartphone or computer, especially if you use your gadgets frequently. Most expense trackers include a budget tool that records your spending and adds them to your monthly totals so you can see whether you’re going over budget or are still in a safe zone.

Subtract Your Regular Expenses From Your Usable Salary: If the difference is a negative number, then you’re most likely falling into debt and must devise a plan to somehow make it work. That’s why it’s important to always review your expenses. Look for regular costs, such as food, travel, and clothes that might be lowered to help you reach your goals.

Be Thrifty

Along with budgeting, you need to be wiser with how you spend your money. Unlike what many people think, it doesn’t have to be a very penny-pinching situation. You simply need to make better purchases, ones that will last you for a significant amount of time and avoid cheap items that will only break after a certain amount of use. Here are some other tips to help you.

Examine Your Transportation Expenses: Determine the cost of using a carpool or bus to work and even other methods like the train. If your total in this area falls, consider replacing your car expenses (like repairs and gas) for a public transportation allowance like a bus card.

Instead of Buying Things Individually, Buy in Bulk: Buying things individually can quickly rack up and make your overall expenses higher. Since it’s cheaper to eat at home, you should stock up on groceries by cutting out discount coupons and buying supplies to store in the fridge. You’ll save up even more if you buy in bulk, and you can be sure you won’t go hungry for quite some time.

Make Wise Large Purchases: Buying large purchases are sometimes inevitable and even beneficial. Everybody needs a good bed to sleep in, a reliable table to eat at, and much more. However, you need to be a bit more conscientious when it comes to purchases. Visit a lot of furniture shops and compare prices before committing. Look for ones that offer you the most bang for your buck, and you’ll feel a lot better with that purchase.

Purchase clothing from a thrift store instead of designer outlets: If you’re willing to sift through the town’s thrift store, you’ll discover high-quality clothes that appear brand new. If you have a lot of clothes you don’t wear, resell them in consignment stores.

Having financial struggles isn’t something to be ashamed of. It’s an experience that’s best avoided, but should you find yourself in it, you’ll learn a lot. Take this opportunity to educate yourself with personal finance, and you’re sure to come out of the experience a wiser person.