Welcome to the latest series here at the wildly popular JosephSangl.com – “Managing Money As A Single Parent”!
Part One Prepare and live by a monthly budget
A monthly budget allows you to tell your money where to go instead of wondering where it all went. Without this basic financial tool in place, you will not be able to maximize the money you have worked so diligently to earn. One of the greatest benefits of budgeting is being able to stop the morning routine of checking your bank account balance! You should prepare a budget every month, and it should be completed before the month actually begins. This systematic approach will allow you to review your financial performance over the previous month and make any adjustments necessary for the upcoming one.
“You can eliminate a lot of insanity from your life simply by preparing and living by a budget.”
By preparing your budget before the month begins, it will provide you an opportunity to recognize upcoming financial challenges and implement steps to address each one. For example, suppose your budget revealed a gap of $220 in the approaching month. Because you prepared a budget before the month began, it provides you the opportunity to either (a) eliminate $220 of expenses in the budget or (b) determine a way to produce an extra $220 in income (like working overtime, selling something, etc.) You could even potentially do a combination of options (a) and (b).
However, if you encountered this scenario without a budget, when would you would discover the $220 gap? That’s right. When your money ran out! This would leave you with little option beyond putting the overages on a credit card or using overdraft. You can eliminate a lot of insanity from your life simply by preparing and living by a budget.
As you approach the end of each month, follow these two simple steps:
- Review your budget for the month you are completing.
- What went well?
- What surprises did you encounter?
- What do you need to adjust for upcoming months?
- Update your budget for the approaching month.
- What items need to be included in this budget?
- Do you need to make any changes to existing budget expenses?
Remember it is important to prepare your budget BEFORE the month begins! This process should take less than 15 minutes each month.
PRACTICAL STEP TO TAKE: Use the free budget tools from IWBNIN: www.iwbnin.com/tools and prepare your budget!