One of the ways to look at a budget is that it is a necessary evil, we don’t like having one, but we must have one to survive and not become broke. A budget is the best and only way to get a handle on your spending and have it be used how you actually want it to be.
In order to create a budget you must follow a few steps completely.
- Figure out exactly how you are spending your money now
- Take a look over your current spending trend and set realistic goals that will also take into account long term financial goals.
- Find a good software program for budgeting that you understand how to use. Don’t go too fancy, the simple programs can help you greatly.
Once you have taken the first few steps in creating a budget there are a few other things you may want to consider. First because you will be constantly monitoring your spending habits, it is important not to drive yourself crazy with watching where money is coming and going. Take a look over how many times you are hitting up the ATM. The ATM generates and added fee that can end up adding up.
Now it’s time to review more of your spending habits
Maybe not the funniest part of a budget, but you really need to address your spending habits. If you find that you are going over more than your income covers, then chances are you are spending some on luxuries, rather than necessities. Take a look over what you really need versus what you can actually live without, and try eliminating the unnecessary luxuries in your life.
One of the least talked about aspects in setting up a budget. Try tithing yourself to help save money. Set a goal to spend no more than 90% of your income, this way you can put 10% of your own income in savings to save up for future purchases or emergencies.
Last but not least, set realistic budgeting goals
Don’t expect yourself to start off with unrealistic expectations. It’s just not that simple with budgeting. It is important to learn how to set realistic goals for yourself and cut corners where you can cut them. Don’t try to strip yourself of all your entertainment as well, just keep it simple and affordable. Knowing where you stand financially is a gift. It allows for all sorts of great things to happen, such as buying a property off the plan (or in the pre-sale stages) and getting a discount.
Having a budget can help many people drastically in the end. However it is always not so easy and simple to stick to in the beginning but in time with determination and motivation you can have a realistic budget that works for you and your family.