Idiot's Guide to Budgeting & Saving

An overnight payday advance is a good short-term strategy to deal with gaps in cash flow. However, in the long run, you want to evaluate your budget and saving skills to better insulate yourself against these fluctuations. Here are some tips to budget and save like a pro.

1. Figure out where you want to go by setting goals. It's hard to give yourself direction financially without knowing where you want to be in a month, a year, or 10 years. Sit down and establish short-term, intermediate, and long-term financial goals. Short-term goals might include saving for a dream vacation or paying off credit card balances. Intermediate goals might include saving money for a down payment on a new car. Long-term goals might include saving for retirement or an education.
2. Establish a budget. You can create a budget in a few simple steps: track, evaluate, categorize, and implement. First, track your expenses and income for at least one month. Figure out where you're spending money and determine your income from all sources each month. Second, evaluate what you've found. Determine if you're spending your money on the things that matter most to you. Also compare your expenses to income-do you have a deficit? If so, figure out ways to cut expenses. Next, categorize your expenses and set limits on each category per week or per month. Finally, implement your budget and stick to it. You won't need an overnight payday advance if you stick to your budget.
3. Build your savings. The best way to buffer against life's unexpected expenses is to have savings you can access in times of need. Savings are a much more economical alternative to an overnight payday advance. If you have trouble saving, start small. Resolve to save just 1%-2% of your income each paycheck and build from there. Eventually, you should try to save at least 10% of your income.
4. Curb your spending habits. The best complement to a solid savings plan is a conservative spending regimen. Excessive spending is often what leads to the need for an overnight payday advance. Try to pay in cash whenever possible to break yourself of the habit of paying with plastic. It's easier to realize how much you're spending when you hand over "real" money.