Saturday, December 18, 2010

Budget Bucket Saving

As the economy continues to struggle consumers and homeowners a like are starting to see the importance of increasing their savings and their savings rate.

I have taken the time to post some simple steps you can take to save more through a strategy known as budget bucket saving. This is a great personal finance tip.

Bucket Budgeting and Saving - Six Easy Steps

Determine Budget Categories

First you are going to want to categorize your spending. this is simple all you need to do is to set down with pen and paper and write down a list of spending categories whether its home expenses, clothes, entertainment, etc., etc.

Plan Tracking Method

Step two is to make sure you keep some sort of record of everything you spend. this can be done automatically through credit and debit cards.

Assign Budget Figures for Each Spending Category

The third step is to set a max amount for each spending category. Tell yourself that you may spend up to this amount but no more.

Start Living and Spending According to Budget

You may have to make some initial adjustments to your category budget amounts.

Once all budget figures are workable really focus on coming out ahead.

Monthly Bucket Audit

At the end of every month see how you did. If you have money left over in a category then scoop it up and dump it into your savings account. Do this with every "bucket".

Savings Bucket Management

You have to protect the savings from you and all that is around you. There are plenty of good reasons to spend that money but you need to get in the habit of making hard decisions.

You need to hoard that cash and focus on making sound financial decisions.

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