One of the greatest challenges people face with their personal finances is preparing a budget that works.
They either put together a budget that does not work, or they can’t even find time to even prepare one.
Sound familiar? If so, read on to discover some tips to help ensure you are able to prepare a budget that actually works.
- Decide to decide Until you decide that budgeting is crucial to taking your finances to the next level, you will always find a way to avoid this “unsavory” task.
- Establish a set time every month When you put “budgeting” on your to-do list AND on your calendar, you create a “trip point” that ensures you don’t forget this important task.
- Be realistic Don’t be ridiculous with your spending plan. If you say that you are not going to spend money on restaurants this month and only $7.25 on groceries, you are LYING TO YOURSELF. Establish a reasonable budget that includes giving, saving, investing, paying the bills, and some fun.
- Prepare the budget BEFORE the month ever begins If you start spending your paycheck before you plan the budget, you will inevitably practice the ancient art of “making your money disappear.” Choose to prepare a budget about 3 to 7 days before your financial month begins.
- Work together If you are married, work together on the spending plan. Chances are pretty high that one of you is a saver while the other is a spender. Use the word “balance” a lot as you approach your budget.
- Keep the end in mind Remind yourself about the “why.” Why are you preparing a budget? What plans, hopes, and dreams will be more likely to happen as you become a better money manager?
- Plan ahead There are several non-monthly expenses that you know are approaching you. Known Upcoming Non-Monthly Expenses (KUEs) like vacation, property taxes, car repairs, Christmas, special days (like anniversaries, weddings, baby showers, and birthdays) are approaching. Save for them monthly so that they do not derail your budget.
Employ these 7 tips, and your budget will begin to be the financial tool you need it to be: one that helps you fund your plans, hopes, and dreams.
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