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Successfully Budgeting When You Rely On Social Security Benefits

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Budgeting when you’re on Social Security ensures you can live comfortably knowing that all your financial commitments are covered. If you’re one of the 67 million Americans that currently receive Social Security benefits, then the recent cost of living adjustment (COLA) of 8.7% will have been welcomed with open arms. But it’s important not to expect COLA adjustments or let them affect your budget, as they’re not guaranteed and next year’s COLA is likely to be less than 3%. So, how do you budget for everyday life when the cost of almost everything is rising?

Consider All Your Income

On average, people on Social Security receive $1,781.63 every month. For some people, this will be their only income, but others will also have money from a part-time job, pension, interest, or dividends to consider. Take note of all your income so you can budget accordingly. Start by focusing on essential expenses first, including rent or mortgage payments, utilities, insurance, and groceries. Then, you’ll know what you’ve got left for non-essential items and luxuries. Be prepared to adjust your budget throughout the year to take into account additional expenses. People tend to spend more in winter due to heating costs, thanksgiving, and Christmas. Meanwhile, irregular interest payments will temporarily increase your budget, but should only be taken into consideration when they’re due.

Boost Your Budget

In the US, the average cost of living for a single-person household is $3,189. It’s fair to say that, for many, the average Social Security check isn’t enough to survive on. Therefore, finding ways to boost your income is recommended to help increase your budget. This could involve taking on a part-time job or doing seasonal work throughout the year. Renting out a room or your driveway can help too. It’s also worth doing things like this when you’re waiting to be approved for Social Security. Disability Secrets reports that on average people wait 27 months for approval. This is because 80% of Social Security applications are initially rejected and claimants have to go to court. Social Security administrative hearings will then take place in front of a judge. Their job is to review all the evidence and cross-examine you before providing a written decision.

Track Your Expenses

Do you know how much you spend on groceries, power, and fuel each month? Most people will have a figure in their head, but the actual amount is likely to be more than this due to ever-growing price rises. For example, in 2022 food prices increased by 9.9% and this year they’ll go up by a further 6.6%. The first thing you should do is categorise your expenses into topics, such as housing, food, healthcare, and so on. You can then go deeper and subcategorise by listing how much you spend on things in each category. So, for healthcare, this may include health insurance, prescriptions, over-the-counter meds, and similar. By doing this, you’ll get a clear picture of all your expenses and it will help you to identify which expenses you could cut.

Social Security is an essential income for many. But it’s often not enough to live solely on which is why careful tracking, budgeting, and additional income streams are needed.

How to Manage Your Company’s Monthly Expenses Efficiently

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Every business owner is aware of two pivotal variables to the success of their business: revenue and expenses. Typically, every business aims to maximise revenue while minimising costs, but this can only be done with effective expense management.

Having control over your expenses can help you better manage them and ensure higher profitability for your business. In this article, we’ll explore some ways to effectively manage your company’s monthly expenses and maintain a positive cash flow.

Create a Plan

It can be overwhelming to navigate through your expenses when you don’t know where to look. A sensible approach would be to first identify where your business stands currently and what goals you wish to achieve.

Creating a well-thought-out plan will help you have realistic expectations to properly forecast expenses and find areas of improvement.

Track Your Expenses

Tracking your costs is critical for managing your expenses. Without tracking your expenses, it’ll be difficult to make well-informed decisions and properly evaluate where you’re spending the most and can afford to cut costs.

To get started with tracking your expenses, you may use spreadsheets, accounting records, or expense management software. These tools will allow you to collect and gather the data related to your expenses and discover key insights to help reduce costs.

Evaluate Past Expenses

If you’ve been diligently tracking your expenses, you might have a large amount of data detailing your company’s cash flow. Looking at your past expenses would help you accurately forecast future costs and set realistic goals.

Set and Track Meaningful Metrics

Companies set metrics, such as KPIs and OKRs to measure team performance or company success. Without setting these metrics, it’ll be almost impossible to know whether or not the company is improving.

However, you shouldn’t just start randomly tracking commonly used metrics. Instead, they should be familiarised with your industry and contribute to the company’s bottom line. Tracking such metrics will allow you to see where you’re spending the most and compare with your competitors enabling you to establish benchmarks and make improvements.

Better Manage Utilities

Utilities such as gas, electricity, Internet, etc., can be a significant part of your monthly expenditure. To reduce such costs, you can’t exclude them entirely, as they might be a necessity to run the day-to-day operations, but it’s possible to lower your costs.

Effective utility bill management can help reduce costs by analysing the costs of the utility bills and highlighting optimisation opportunities. Apart from that, you can also take steps to use less of these resources, such as using solar panels to generate electricity or downsizing the workspace and installing environment-friendly machinery.

Alongside this, it’s also important to encourage staff members to responsibly use resources, such as turning off the lights when leaving their workspace.

Invest in New Technology

Technology keeps advancing rapidly, and now, with all the emphasis on creating energy-efficient or environment-friendly technology, business owners should be in the know. Newer, more-efficient technology can help reduce costs in the long run and improve productivity.

You can save costs on your current processes by investing in more technologically advanced machinery and tools to help your company perform better and reduce expenses in the long run.

Lookout for Better Deals

Business owners often overlook fixed costs as they seem to be comfortable with market standards or consider them generally recurrent. However, smart business owners are always on the lookout for a better deal and constantly test the waters for newer materials and cost-effective suppliers.

Every month, you should make it a habit to request a few quotes or proposals from other suppliers. You may be able to strike a great deal that would lead to reduced costs in the future.

Conclusion

Every company has expenses, but what separates a successful business from failure is effective expense management. Companies that manage their costs can remain competitive in the market and maintain high profitability.

This article talked about how to manage your expenses effectively. To summarise, business owners can better manage their monthly expenses by creating a plan, tracking their expenses, managing utility bills, tracking useful metrics, and investing in new technology. Hopefully, this article has provided you with some insight to start reducing your costs today.