I spent many years trying to convince my dh that we needed to set up a budget. There was always some sort of reason why we couldn't. Now he is a budgeting convert. He has come to realize that even if we aren't making a boat load of money, we can be need free through budgeting.
Many people look at budgeting with the same distaste as dieting, both words have achieved a "four letter word" status. It doesn't need to be that way though. When you decide to lose weight and to make it a "life style change" instead of a "diet", you have changed the bad word "diet" to a good word "life-style change". You can do the same with budgeting. Just like a diet is a plan for eating, budgets are a plan for your finances. It isn't restricting what you can do, it is you PLANNING what you can do. Do you want a new car? Then budget for it. Do you want a new home or pay off the one you have?...Budget for it.
I like things simple, if it is complicated then I won't do it. Budgeting is simple. You write down the amount of money that comes in each week or month, then write down how much you spend in that time frame. If you spend more than what is coming in then you need to look at what you are spending and cut out the extras. (Thats the hard part!) You have to do it though so you can start living within your means. When you are living within your means you have less stress. Now raise your hands if you want less stress! Next look at any debt that you could start to eliminate. Credit cards, car payments, house payments, ect. all can be eliminated. Start with your smallest bill and pay any extra that you can over the minimum payment. Once that one is paid off then take what you were paying on that bill and add it to the next smallest bill. Before you know it you will have paid off your debt! Now don't expect this to happen over night, it does take time and discipline (another bad word!).
While you are using your budget to pay off your debts you can also budget (plan) for things that you want. Just add a category for your particular want. If you want a house then add a category for new house and start putting back money for it. It doesn't have to be much. Remember "A penny saved is a penny earned." any amount you are putting back will add up. Then put compound interest to work for you instead of against you. Put the money that you are putting aside into a savings account AND DON'T TOUCH IT! Then the bank will start helping you attain your goals, but the key is to NOT TOUCH IT!
Knowing what your money is doing and where it is going will help you achieve your goals. Please don't be afraid to use a budget! It is just a plan. I know that you have probably heard this saying a lot but I want to say it again...Failure to plan is planning to fail. Make your plan today!
Many people look at budgeting with the same distaste as dieting, both words have achieved a "four letter word" status. It doesn't need to be that way though. When you decide to lose weight and to make it a "life style change" instead of a "diet", you have changed the bad word "diet" to a good word "life-style change". You can do the same with budgeting. Just like a diet is a plan for eating, budgets are a plan for your finances. It isn't restricting what you can do, it is you PLANNING what you can do. Do you want a new car? Then budget for it. Do you want a new home or pay off the one you have?...Budget for it.
I like things simple, if it is complicated then I won't do it. Budgeting is simple. You write down the amount of money that comes in each week or month, then write down how much you spend in that time frame. If you spend more than what is coming in then you need to look at what you are spending and cut out the extras. (Thats the hard part!) You have to do it though so you can start living within your means. When you are living within your means you have less stress. Now raise your hands if you want less stress! Next look at any debt that you could start to eliminate. Credit cards, car payments, house payments, ect. all can be eliminated. Start with your smallest bill and pay any extra that you can over the minimum payment. Once that one is paid off then take what you were paying on that bill and add it to the next smallest bill. Before you know it you will have paid off your debt! Now don't expect this to happen over night, it does take time and discipline (another bad word!).
While you are using your budget to pay off your debts you can also budget (plan) for things that you want. Just add a category for your particular want. If you want a house then add a category for new house and start putting back money for it. It doesn't have to be much. Remember "A penny saved is a penny earned." any amount you are putting back will add up. Then put compound interest to work for you instead of against you. Put the money that you are putting aside into a savings account AND DON'T TOUCH IT! Then the bank will start helping you attain your goals, but the key is to NOT TOUCH IT!
Knowing what your money is doing and where it is going will help you achieve your goals. Please don't be afraid to use a budget! It is just a plan. I know that you have probably heard this saying a lot but I want to say it again...Failure to plan is planning to fail. Make your plan today!
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