Top 7 Smart Budgeting Tips For Renters In New York

The world seems to run after earning money from every possible source. Why not? The prices and rates of almost everything are surging. There are rent, medical bills, and tuition fees, daily and monthly expenses, and more. However, there is a catch, this generation, as interested as they are to hoard the finances; They are ready to splurge on and for anything and everything. What people forget is to save their money for the essential things in life. Clearly, this is not smart budgeting.

Budgeting and setting financial goals are not only for people who have limited funds. This implies everyone, and especially for the renters. A smart budget is not rocket science; all you need to be is vigilant, plan properly, and be dedicated to sticking to your budget.

Now that you have made a significant expense and moved to your new apartment, you need to take a back seat with the expenses. You must take control of your expenditure and plan your month by limiting a few things. Frets not, listed below are a few tips that can be followed and executed efficiently for smart budgeting for renters.

Curate A Monthly Budget Plan For Yourself

If you have a budget crafted for yourself, you will be ready for the impromptu expenses coming your way. It could be for a sudden weekend brunch or a new car, perhaps. First things first, you must keep track of your expenditure.

Where does all your money go? You could either note all your expenses on a piece of paper or make a spreadsheet file. Make sure you are noting down every expense that you are coming across. Whether it is for entertainment, official purpose, or housing, you must categorize them by types and sections. It would be much easier for you to observe your expenses and make the necessary changes.

Follow The 50/20/30 Rule

Pre-plan how much you need to spend on each category so that you meet your financial goals. One easy way to divide your budget plan into segments is by using the 50/20/30 rule of budgeting. This rule suggests you spend 50% of your salary  on essentials (rent, utilities, groceries, etc.) 20% must go to your savings(EMIs, installments, and debt repayment), and 30% is to be used on personal items or anything you like (online streaming services, dining out, online shopping, etc.)

While it seems easy and exciting to have 30% of your salary on things you like, there’s a catch: it can be slightly challenging to purchase all your essentials within 50% of your income. However, it would be best if you kept trying. Budgeting requires you to be disciplined and dedicated to your planned expenditures. Before you know it, you will be saving a lot.

Keep Room For Unplanned Expenses In Your Budget

It is smart to plan your budget according to your rent, bills, groceries, amenities, and daily expenses. However, if you are not budgeting for special occasions like anniversaries, birthdays, holidays, gifts, and vacations, you make a huge mistake. You must be ready to pay for special events and surprises. If you are not expecting any expenses for special occasions, pass the remaining amount on to the next month. This would give you a bigger budget for the holiday season.

Budget Tracking Should Be A Habit

If budgeting becomes a habit, you will be able to accomplish your financial goals. Because you will be able to practice how much you have to spend every month, it will later come naturally to you how budgeting can be done while you are shopping at a grocery store or dining out.

To ensure that you do not forget about budgeting at any given moment, you must install a verified budgeting app. You can add your bank account and credit/debit card details. This would automatically track your expenses and spending activity.

Make An Informed Decision About Housing

Undoubtedly, the most significant expense in anyone’s income has to be the rent and housing expenses. The general thumb rule that must be followed is not spending more than 30% of your income on rent. This means you must be well aware of the rent that you will be paying when you are finalizing your apartment.

If you see it crossing 30%, then consider negotiating your rent with your landlord.  If you think the apartment is spacious enough, you could split the rent with a roommate. These are some of the most significant ways to cut down on your expenditures. However, make sure you get permission from the landlord if you plan to add another person to your lease.

Set Financial Goals

It is vital for your growth and financial stability that you have a financial goal on your mind. It could be a house, a world tour, and much more. Before you think of splurging on a designer bag or fine dining, imagine yourself owning and living your dreams and goals. Nothing would seem as tempting as your ultimate goal in life.

Alter Your Budget Plan Regularly

Sometimes you might go over the budget. As disappointing it is for you, it is absolutely normal. However, keep track of your expenses and adjust your budget for the next two months. Be reasonable yet responsible when re-planning your budget.

Keeping the tips mentioned above in mind, you can easily track your budget. Budgeting, once a habit can lead to massive savings. This would help you on your rainy days. Being a renter does not mean you have to compromise on things you like. All you have to have is a plan that needs to be executed properly.