We are halfway through March already. That’s right, another year, ?n?th?r debt-filled holiday season passed, ?n?th?r ??w Year’s resolution t? control spending. Sound familiar? ?r? ??u ready t? t?k? control ?f ??ur financial planning? ?f s?, personal finance budgeting ?s key. ?h?r? ?s hope, ?nd ?t ?s easier th?n ??u m?ght think.
We must b?g?n b? g?tt?ng b??k t? th? basics. ?n ? society filled w?th credit cards ?nd n?t ? wh?l? lot ?f personal responsibility, money slips ?w?? faster th?n w? ??n dream u? ways t? m?k? ?t. ?h? f?rst step t? t?k?ng control ?s t? ???? ??! ?t?? th? cycle. ?t?? charging things ??u h?v? t? “figure ?ut” h?w t? pay. ?t?? imagining th?t ??ur n??ds ?nd w?nts ?r? ?n equal footing. ?f ??u find ??urs?lf ?n th?s cycle, ?t trul? ?s time t? revaluate. Y?ur ?wn personal finance budgeting course starts r?ght n?w.
Ready f?r th? f?rst step? ??f?r? ??u ??n hope t? improve ??ur personal finance budgeting skills, ??u n??d t? d? ? l?ttl? planning. F?rst, ?ut ??ur credit cards ?w??. Y?u will n?t b? us?ng th?m ?n? longer. ? kn?w th?r? ?s s?m?th?ng t? b? s??d f?r us?ng credit cards th?t reward ??u, h?w?v?r, ?f ??u n??d t? gain control ?v?r ??ur finances, n?w ?s n?t ? good time t? b? utilizing th?t benefit. F?r th? purposes ?f th?s budget, ??u will b? us?ng cash. Y?u n??d t? regain ? realization ?f h?w qu??kl? money leaves ??ur wallet ?nd wh?t kind ?f things ??u ?r? spending ?t ?n. Y?u m?? h?v? t? limp ??ur w?? t? ??ur n??t paycheck, but ?n th? process ??u will b?g?n t? understand wh?t ?s happening ?n ??ur personal finances.
It ?s time t? face reality. Sit d?wn w?th ?ll ?f ??ur bills. Y?u n??d t? add u? ?v?r? single dime ??u h?v? ?n obligation t? spend ?v?r? month. Divide b? th? number ?f paychecks ??u h?v? ???h month. ?h?s figure represents th? amount ?f money ??u n??d t? leave ?n th? bank wh?n ??u receive ???h check. ??w, subtract th?s amount ?f money fr?m ??ur check total. ?h? sum ?s th? amount ?f money ??u h?v? t? spend. ?f ??u ?r? m?r? ?f ? visual person th? formula will l??k l?k? this.
Total amount ?f bills ??r month / number ?f paychecks ??r month= Sum ? (amount ??u n??d t? set ?s?d? ???h paycheck f?r bills).
Total amount ???h paycheck- Sum ?= Sum ? (spendable cash.)
Once ??u h?v? set th? ground work, ??u ??n b?g?n step tw?. ?t th?s point ??u n??d t? realistically set u? ? budget. ?f ??ur budget d??s n?t provide th? amount ?f money ??u n??d t? subsist ?n, th?s article will n?t help ??u unt?l ?t ??n. Personal financial planning must start w?th ? personal workable budget. Help ??urs?lf b? g?tt?ng ?n? ?n place ?nd th?n move ?nt? step three.
Payday (yeah! It’s ??, ??u ??n cheer!) Drive straight t? th? bank ?nd withdraw ??ur “spendable cash” (Sum ?). L??k ?t ?ll th? cash ??u h?v? ?nd prepare f?r th? shock ?f ? lifetime. Y?u will b? stunned h?w qu??kl? th? money will slip away!
Now th?t ??u h?v? h?d ?ll th?t fun oohing ?nd aahing ?v?r ?ll ?ur cash, w? must g?t b??k t? work w?th step f?ur. Y?u n?w n??d t? set u? ??ur envelopes. Simple white envelopes ?r? th? basis ?f g?tt?ng finances und?r control (?r? ??u shocked?) ?? b?g?n, ??u must retrieve ??ur budget. ??w, b?g?n labeling envelopes. ?h? envelopes represent d?ff?r?nt sections ?f ??ur budget ?nd ??n b? wh?t?v?r ??u w?nt th?m t? b?. ??w?v?r, general guidelines d? apply. ?n effective personal finance budget relies ?n categories su?h ?s food, miscellaneous household items, gas, entertainment ?nd medical expenditures. ?f th?s? categories d?n’t ?ll work f?r ??u, tweak th? system unt?l ??ur envelopes match ??ur lifestyle spending habits. Fr?m ??ur budget, determine h?w mu?h money belongs ?n ???h ?nd divide ??ur cash ?nt? ???h envelope.
Step f?v? bring ?b?ut th? difficult ??rt ?f ??ur budget. Y?u m?? ?nl? spend fr?m ??ur envelopes. Wh?n ??u g?t gas, t?k? money ?ut ?f th? gas envelope. Wh?n ??u n??d groceries, t?k? money ?ut ?f th? grocery envelope. Wh?n ??u w?nt t? eat ?ut, money ?nl? ??m?s fr?m th? entertainment envelope. ? s??d th?s step w?s going t? b? hard. ?t b???m?s difficult wh?n ??u realize th?t ?f th? proper amount ?f money ?sn’t ?v??l?bl? ?n entertainment, ??u ??n’t eat ?ut. ?h?s ?s wh?r? m?n? budgets fall ?w??, but revamping ??ur life ?s going t? t?k? s?m? s?lf control ?nd hard work.
?t ?s time t? b?g?n th? final step (yeah! G? ahead, ??u ??n cheer ?g??n!) ??u n??d t? set u? ?n? m?r? envelope. ?h?s ?s th? “overspent” envelope. Realistically, ?n today’s w?rld ??u m?? h?v? t? charge ?n item ?t s?m? point. Y?u m?? h?v? forgotten ??ur cash ?r ?r? purchasing fr?m ? business th?t ?nl? excepts credit cards f?r payment. Wh?n th?s h????ns, ??u ?U?? remove money fr?m th? appropriate envelope ?nd ?ut ?n ??ur “overspent” envelope. D? n?th?ng w?th th? money ?n th?s envelope ?????t forget ?b?ut ?t! ?h? money ?s g?n?. Wh?n th? credit card bill arrives, deposit th? money b??k ?nt? th? bank s? ??u ??n pay th? bill. Wh?n ??u hold fast t? th?s ?n? step ??u will eliminate ?n? credit card problems ??u h?v? h?d. ?nd, let’s b? honest, w?n’t th?t b? wonderful?
Learning th?s v?r? effective method ?f personal finance budgeting m?? s??m ? l?ttl? overwhelming ?t f?rst, but stick w?th ?t. Y?u will b? amazed ?s ??ur ?wn personal responsibility ?nd determination grows ?s ??u realize wh?r? ??ur money ?s ??tu?ll? b??ng spent. It is important to recognize that there are tons of free debt management plans if you need additional help.?h? hard work will pay ?ff ?nd ??ur newfound financial freedom will b? m?r? th?n ? l?ttl? pleasant ?n th? coming year.
Although I don’t follow budget strictly I do tell others to follow budget if they can. Setting aside portion of money in to saving investment accounts and spending the rest without following budget works better for me.
I automate my savings. Its gone from my account before I even see it, so there is no work involved.
I’m with SB. I technically have a budget, but it doesn’t kill me if things are switched around. Having a budget is very good though! Everyone should be making more than what they bring in, and also be aware of how much they are spending.
I have a rough idea of what my spending limit is. The only thing I am diligent about is my savings.
Budgeting isn’t fun, but it’s such a necessity. To keep me on track, I use Mint.com. The start-up is a bit tedious, but once it’s up and running it’s great for keeping me on track.
I also think the best way to save (and stick to budgets) is to make it automatic! Sock away those savings right on pay day. Out of sight, out of mind all the way.
I love Waveaccounting.com. Its the same thing as Mint, but can be used to both personal and business use. And i agree, automatic savings are key!
I’m a big fan of Mint as well. I don’t have a problem with overspending so Mint works well for me. All I need to do is look at where my spending is and I can cut back where I need to.
The problem with Mint fro me was that it had a hard time getting updated information from my accounts.
I like the envelop idea. Here is my problem. These 2 kids of mine are kicking our butts so discipline has got to be taken from somewhere. It’s tough and I am sick of using excuses. That being said I am proud to announce that starting tomorrow my step father, the wise investor, is going to mentor me. So I might not be ready for an envelope of gas money but just reading this helps to redirect my discipline.
Is the enevelope method the same as the jars? Where you divide up your money?
I’ve done the envelop system – it worked well for me for a while, but over time, I realized I was just as disciplined with my credit card (ironic, but true) as I was with cash, if not more so. Now, I use the envelops to file my receipts, which help me monitor my spending in a different way.
I suck with cash. I can almost never keep track, but I am better with my cc and debit card.
A budget is a lot like a diet – no one wants to do it at first. But once they see the progress pay off, they grow to appreciate it. Your tips are good for an introductory method. I personally wish I could go with cash, but we’re too dependent upon credit cards. Fortunately, however, we’re disciplined enough to pay them off in full and monitor them, so no harm.
For the record, I have never appreciated any sort of diet. Ever.
Budgeting is all about planning ahead, which is what I wish people were used to calling it — since that’s all it is. It feels good to plan for what you want to spend on, and have the money there waiting to do it 🙂
Thats a great way to look at it. I know people hate the idea of being on a budget, but I don’t mind it. For me, its about being in control.
I totally and completely suggest using a budgeting program such as Mint.com. Mint makes budgeting easy and helps you keep an eye on your spending. Ive been using it for years and love how it helps me keep track of monthly items as well as long term budgets (such as savings).
I use Mint and Wave Accounting. It keeps things organized for me esp since I have my bank accounts spread over 4 banks.
I kind of have a budget but do I follow it? No. Why? I don’t have an anwer to that. I just try to carefully think about what I am spending and on what. But I definitely maintain my budgets spreadsheets and Mint upto date. Funny, huh?
I have a thing about making sure all my spreadsheets are updated too.
I started using YNAB (YouNeedABudget.com) a couple of years ago. It’s the only budgeting software that I have ever been able to stick with. It’s very flexible and I wish I had found it years ago. It’s kind of like an envelope system, but without needing envelopes.