6 Tips To Get Into Your Budget Zone
It’s that time of year when many of us are making plans for our money. If you want better results with your personal finances, you must start with the basics, and that is with a budget. We must make a lifestyle change and incorporate doing a budget all year around, not just for the New Year. I use to mismanage my money all the time, but one day I got sick and tired of being sick and tired of all of the problems that came with mismanaging money. A budget doesn’t have to be boring. It doesn’t mean that you can’t have fun with your money. It simply means you are making a plan for your money every month before the month begins. If you don’t have a plan you may end up overspending, which can lead to borrowing money just to get by. Being successful at managing your personal finances takes practice, but you will never get there until you START!
6 tips to get into your budget zone:
List all of your income from all sources! Depending on how often you are paid, will determine if you need to do a weekly budget, biweekly budget or monthly budget. Or it can also depend on preference. I personally do a monthly budget, but I also check in with myself on a weekly basis to make sure I’m on track.
Start deducting your expenses from your income total! Start with the basic living expenses first, such as rent/mortgage, water, electricity, phone, gas, car note and food. Then start deducting the rest of your monthly expenses in order of importance.
Save! Every time you receive money, save some. Even if it is as little as $20.00, still save. A little can add up to a lot over time. You must start building your emergency fund for when those unexpected issues happen. You can also save for other wants and needs. If you plan to take a vacation or make a large purchase, plan for it by saving for it.
Adjust as needed! Every month doesn’t always go as planned. As you’re going through your month, make sure you adjust as needed when unexpected items pop up. Such as a traffic ticket, an important event, or maybe you got sick and needed to go to the doctor which required a copay. For these type of unexpected expenses, I suggest having a budget category called “Miscellaneous or Randoms”. Having some extra funds set aside is better than having none. If the month ends, and you don’t use it, just roll it over to the next month. Feel free to call this budget category whatever you like.
Pay off debt! If you have debt, make sure you are paying towards it every month. The longer you ignore debt, the more damage it can do in your life. Especially debts that are in collections. The quicker you can pay off debt, the more money you will have to use towards other things.
Sacrifice! If your expenses are more than your income, then you need to figure out ways to cut back on expenses until you can get your budget to a level where your income is exceeding your expenses. Consider increasing your income by creating multiple streams of income. It’s ok to get a second or third job temporarily if that’s what it takes. Get creative and figure out ways to make passive income as well. Remember needs versus wants. Always live on less than you earn. We should never spend every single dollar would make. Sacrifices can bring a lifetime full of rewards.
When I do my monthly budgets, I do two things. I’m still old school with pen and paper, so I write down my monthly budget. I also use a budget app. This is my own way to stay organized and on track. I use Dave Ramsey’s Every Dollar app. I use the free version, but you are more than welcome to utilize all that the app offers. Check it out at EveryDollar.com.
Give it a try and keep me updated on your progress. Remember to organize your budget in a way that works for you. If you need additional help or have questions, please contact me. I am happy to help!