Strapped for cash?
The average consumer wonders where all their money went. From the countless cups of coffee to the occasional lunch out, all these expenses add up fast.
First off, look at previous years and see how you allocated your budget. Look at old credit card and bank statements to get a better understanding of your allocation.
Based on the CreditLoan's 2016 data, the average income before taxes was $74,664 and the average expenditures was $57,311 which does not leave much wiggle room for savings. Housing lead the way with costs followed by transportation, food, and pensions & personal insurance. A cost that can add up big is dining out. More and more people are choosing to cook less. Dining out can rake up bills tremendously.
Since 2006, many expenses have increased by more than twenty percent which includes pensions & personal insurance, healthcare, and entertainment. Although healthcare is not the largest expense, the cost grew to be as much as sixty-seven percent.
Although many expenses have been increasing, two categories have not. Expenditures on clothing and services have seen a decrease in spending. This may be due to the changing mentality which people are choosing experiences over stuff.
Understanding your budget
To reduce the financial stress, you must differentiate your needs from your wants. Budget out the things you need each and every year such as housing and transportation. See how much you have left over to allocate money to entertainment, going out to eat, or other expenditures. Once you have this all said and done, you will be able to craft a budget that can truly fit your lifestyle.