The idea of budgeting is not difficult – decide where you want your money to go, then make sure it goes there. However, it’s much easier said than done. Budgeting is made up of lots of little decisions, all used to uphold the one greater decision of creating a budget to get your financials under control. With all of this in mind, we’ve compiled eight steps to help jumpstart you into budgetary bliss!
- Get a Fresh Start
Chances are, if you’re reading an article about building a budget, you’re trying to find a system that really works. Make it easier on yourself and clear your mind of whatever budgeting past you’ve had – start from scratch. Rebuild a budget on a strong foundation with a fresh start, and see how far you can go!
If the word budget makes you cringe, let’s work on reorienting your thought process. Budgeting isn’t a way for you to get rid of all of life’s fun and only eat ramen for the rest of your days. It’s creating a formula to help you prioritize what you truly want in life and make it happen. Saving in smaller areas can help you cut debt in much larger areas, which will free your financial situation long-term.
- Give Each Dollar a Place
This is the part where we encourage you to spend every dollar. Okay, maybe not “spend,” but ensure that every dollar has a purpose. If you’re looking to put 20% of your income into savings each month, mark that down. You’ve now “spent” that money. Continue doing this with every dollar that comes your way, so that every dollar knows where to go.
- Pay it Off
One of the greatest things you can do for yourself is to get out of debt. Interest rates will only increase over time, and that’s money you’re losing in the long run. Do what you can to pay off your debt early, and quickly.
- Keep Track
It could be anything from paper and pen to the latest app for your iPhone (here’s three we suggest), but the key to making a budget work is keeping track of it. Once you’ve established a budget that works, stick to it! Record your purchases, keep track of your spending, and take control of your finances.
- Be Kind to Yourself
Of course, it's easy to write about being a budgetary stickler, but acting on it is much harder. It requires the ability to squelch the craving for instant gratification. While this can be done, if ever you slip up, know that it is going to be okay! A budget creates great guidelines for you to follow, but if you go over-budget one week, the world will not end. You spent a little too much, but you're going to be alright. Just keep budgeting and do your best to fix it for next week!
- Make Adjustments
As we just discussed, sometimes your budget isn't spot on, and you go over-budget. However, you can also find yourself under-budget. IF either of these situations are happening regularly, it might be time to sit down and adjust your budget. Maybe your income increased, maybe you're spending a little differently. Regardless of what has changed, as long as your situation is fluid, so should be your budget. As life changes and fluctuates, be willing to do so with your budget. Of course, not to an extreme, but little tweaks here or there will help you stay on track and spend your money in the best way you can.
- Fall in Love
Whiel you may have once seen budgets in a negative light, using one you've created for yourself can be immensely gratifying. Stick to what you've planned, use your money wisely, and gain control of your financials! The lasting impact of a budget is seen over a period of time, so the longer you work at it, the greater your reward.
The information being provided is strictly as a courtesy. When you link to any of the web sites provided herewith, you are leaving this site. We make no representations as to the completeness or accuracy of the information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technology, sites, information and programs made available through this site. By clicking on the links above you will leave our web site and assume total responsibility and risk for your use of the sites to which you are linking.
The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement. To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual's goals, tme horizon, and tolerance for risk. NPC does not render legal advice.