Now that we have established the importance of the budget, its time ti go about how to come up with a budget that is custom-made to your specific needs and goals. It’s the only way to take control of the erratic behavior of your finances, that is, one month you have surplus money in the bank, the following month you are as broke as ‘hell’. But your financial destiny is in your hands, not the federal reserve or central bank, or the government. The following tips by Crystal Graham should you in you journey of attaining financial freedom.
The most effective way to fix your financial problems is to be aware of exactly where you stand with money. The following ten tips on budgeting will show you how to take control of the situation.
Tips On Budgeting One – Why You Need A Budget
The main reason to create, and follow a budget is to put you in control. It will also assist in relieving all the stresses you have about your money, and where it goes. Additionally, it will help you control and reduce your debts if you have them, plan for the future and save money.
Tips On Budgeting 2 – Your Budget Plan
When you are planning your budget, don’t just concentrate on your present income and outgoings. You need to plan for your future, and include savings bonds or other interest generating activities that will look after you in the long run.
Tips On Budgeting 3 – The First Steps To Your Budget
Create your budget to record monthly income and expenditure, and allow yourself to plan for the coming months. Being aware of how much money you receive every month, is often much simpler to record than all of the expenditure you incur during the month. Prior to starting your budget lay your hands on your check account records for the last year, as well as your credit card records. You need to do this so that you don’t miss non monthly payments (quarterly or annually).
Tips On Budgeting Four – Now Make Your Budget
Use column one of your worksheet to record your income at the top, and then below list all of your regular payments. As well as the most obvious payments such as home loans, electric and gas bills, loan repayments and so on list all of the cash payments that you make on a regular basis like travel to and from work, lunch and take out coffee, eating out and cell phone costs.
Tips On Budgeting Five – What Is The Result?
After you are sure you have recorded all the data then you are ready to do the math. and see if you have a positive balance at the end or a negative one. A lot of you will find you have a negative situation which means you are outgoings exceed your income. If you are in this position don’t worry. The truth will set you free.
Tips On Budgeting 6 – Look Closely At Your Outgoings
Carefully look at all areas of your expenditure. Are there things you can cut out or reduce your spending on? Without a doubt there will be. Dining out, buying newspapers, coffee everyday, extravagant purchases, too many cell phone calls, using cabs where you could have got the bus or subway, hopping in the car for short journeys when you could have walked (and benefited from some good exercise), the hundreds of cable or satellite channels that you pay for and rarely watch – the list is never-ending. You need to set a target to eliminate all unnecessary spending – don’t go for 30% but 100%. Even if you don’t meet this target, you will be amazed at the amount you will save as time goes on.
Tips On Budgeting 7 – Use It All The Time
There is no point in creating a budget for one time use. You need to update it regularly with items you have forgotten, unscheduled payments, increases in income and so on. It is also useful for future spending. Give this a try – calculate what your total outgoings for the week ahead should be in terms of shopping, traveling and cash spending and then withdraw exactly that amount of money at the beginning of the week and use it. You will probably find that you will cut out even more unnecessary items as it will be really painful to spend the cash.
Tips On Budgeting Eight – Your Budget And Your Future
Another benefit of having a budget is the ability to plan for your future. You can schedule expenditure for savings, retirement plans, future vacations, next car purchase, next home purchase, putting your kids through college and even a second honeymoon. Whatever your dreams for the future are, you can make them happen with a well thought out budget.
Tips On Budgeting 9 – Increase Your Income
Don’t only concentrate on cutting back on expenditure, but think about how to increase your income. There are a multitude of ways that you can achieve this – work overtime, another part-time job, have a yard sale, sell all the things you no longer require or need on eBay or start a business from home. If you focus your attention on improving your income then you will become so busy that time will not be available to go to the mall, and waste your money on goods you don’t really need.
Tips On Budgeting 10 – Start Right Now
You will experience an enormous feeling of relief, and satisfaction once you have created your budget and finally have control over your finances. Don’t be like the majority of people who are not in control and have no idea where their money is going. It doesn’t matter if your budget is negative, you now have the power to change the situation. These tips on budgeting will help you if you take action – so use them now!