Budgeting is one of the biggest key to managing your money (now and in the future). Budgeting is balancing your expenses with your income. This spending plan used for this process is called a budget. Creating this budget allows you to determine in advance whether you will have enough money to do the things you need to do (or would like to do).
If you don't have enough money to do everything you want to do, then you can use your budget to prioritize your spending, and focus your money on the things that are most important to you. Below are five points that will help you look at your budgeting more realistically:
1.
Budgeting Can
Be Simple You can simplify the process by using percentages of your
income to cover your set expenses, savings amounts, and your spending money.
Then you simply track the money as you spend it. This means there are lot fewer
categories, and a lot more flexibility. You may decide to switch to an envelope
system, which eliminates the need to track your spending.
Keep at it. The first few months of budgeting are a bit more
difficult as you adjust your categories to find the amounts that work for your
situation. Cash can help make it easier. If you are married, budgeting meetings
with your spouse can make handling your money much easier.
2.
Budgeting Helps
You Reach Your Goals A
budget is a plan that helps you prioritize your spending. With a budget, you
can move focus your money on the things that are most important to you. This
may be getting out of debt, saving up for a home, or working on starting your
own business.
Your budget creates a plan and lets you track it to make sure
you are reaching your goals. Set aside money in your budget each month for
your goals. Your budget will help protect the money you have already saved.
3.
Budgeting Helps
You Save Money People who do not have a budget tend to save less money than
people who do. This is because when you budget you assign your money to do
certain things. This allows you to automatically put money into a savings or
investment account each month.
A budget can help you stop
dipping into your savings each month. As
you do this you will begin to build wealth. This will give you true financial
freedom in the future. Use your budget to save emergency
funds by planning for most unexpected expenses in advance.
4.
Budgeting Helps
You Stop Worrying Most
people do not like the restrictions that having a budget will put on them. How
will you decide to spend in each living category? If you want to put a large portion of your
money towards your leisure activities, as long as you are saving and meeting
your other needs.
You shouldn't feel bad about that. Once you set up limits
you need to stick to them. If you aren't doing that you may have a budgeting
weakness that you need to address. Budgeting is not about limiting the fun in
your life, but opening up opportunities and money in order to have more fun.
5.
Budgeting Helps
You to be Flexible Budgeting
can be flexible. You can move money between life categories as you need to
throughout the month. You should restrict yourself from touching the money you
have set aside for savings, but you can adjust the amount you spend on each
life category as you go. Budgeting lets you adjust to cover unexpected expenses
as they happen. Learn how to transfer money in between life categories in your
budgeting software.
6.
Budgeting Puts
You Into Control If
you feel like you are not in control of your money, and are constantly
wondering where it went and what happened to it, budgeting can put you in
control. It allows you to prioritize your spending, track how you are doing,
and realize when you need to stop. It puts a solid plan into place that is easy
to flow, and gives you the chance to plan and prepare for the future.
It is the biggest tool you have to change your
financial future, and it gives you the power to make changes starting
today. Checking on your budget each day can help you to monitor it and
keep you from overspending. Making decisions at the beginning of the month
makes it easier to manage your money.
7.
Budgeting Stops
Overspending Most people who do not have a budget end up overspending
each month. This limits their spending power in the future as more of their
salaries have to be applied to debt payments. If you are worried about
restricting your spending, consider what it would feel like to have the
majority of your paycheck be applied to credit card payments.
Use your budget to help you determine when to stop spending.
The stress of finding a way to pay for the rising cost of gas and food can be
exorbitant when most of your paycheck is already planned. An envelope
system or budgeting
software can make the budget process
easier.
“You must walk to the beat of a
different drummer. The same beat that the wealthy hear. If the beat sounds
normal, evacuate the dance floor immediately! The goal is to not be normal,
because as my radio listeners know, normal is broke.”
(Dave Ramsey)[i]
[i] Sources used:
No comments:
Post a Comment