Many of us have either created or attempted to create an effective budget at some point. For those of us who have, budgeting or “good money management” is probably one of the most difficult things we face in dealing with our finances. What we need to realize is that successful budgeting is key to good financial well-being, and it really doesn’t have to be that hard. Not only is creating a budget key, but to stick to a budget is just as important. If we don’t stick to the budget we set, we will without a doubt, fall short of our financial goals and even worse, potentially get ourselves into financial trouble. Creating a budget puts us on the road to financial success and sticking to the budget will keep us there!
To help create a spending budget that’s not just sensible, but also effective, we need to start by calculating our income. Once we’ve calculated our income, then we can list our expenses by first making a list of our fixed expenses such as rent or mortgage payments, automobile payments, insurance premiums, etc. After that, we need to create a list of our fluctuating expenses. These include expenses for dining, dry cleaning, hobbies, etc. along with other invoices or expenses which don’t have a payment that is consistent. Spend some time to examine old bank statements to assist with calculating estimated amounts for these expenses. This next step is vital to successful budgeting. We have to separate our needs and wants. Once we have our lists of expenses, we need to assess those lists for areas where it’s possible to curb costs or eliminate them altogether. This is especially significant to successful budgeting in order to get rid of debt or conserve money toward a particular goal. Any place where we see we’re definitely wasting money, do away with it! We also need to make sure our expectancy is realistic. The aim of an effective budget is to plan for real expenses while at the same time setting targets for spending that will make it possible for us to conserve money. To help with the process of putting together a budget, consider using budgeting apps or programs to give guidance in creating an effective budget and savings goals.
To create and stick to a budget is empowering, because it allows us to have control over our money. In order to have control of our money we need to know where every dollar is coming in from and where every dollar is or will be going out to. That’s the power of budgeting! Knowing the numbers…our financial numbers…the dollars and cents of our cash flow. Without knowing our numbers, we’re just flying blind with no goal or direction. How can we get to where we want to go if we don’t have a plan on how to get there?! So, take the time to go through the process of setting up an effective budget and stick to it. The path to financial freedom is waiting for us.
Before you go, I want to invite you to join my FREE email list community. By signing up today, you’ll get notifications of my latest posts. Plus, access to my FREE Resources Library. Click Here to sign up!
