Let’s flip the idea of budgeting as being a long, laborious and boring task on its head. Creating and managing your budget is going to give you a great sense of financial stability and you’ll regain control over your money.
Here are some of the budgeting skills that you really need to master if you want to reach financial success.
What do you think when you hear the word ‘money’? What does it mean to you – power, freedom and control? When it comes to budgeting all you need to do is think of money as a tool. Money is there to make you do the things that you need and to help you to achieve the things that you want. It really doesn’t matter how much money you have, budgeting is all about making the most out of what you have available.
Check your transactions
This is probably the part of budgeting that takes the most effort, but it needn’t be time-consuming. There are many apps out there (like Mint) that can track your spending (and some even present you with a spending analysis) so all you have to do is log in! Once you know what you are spending it you have the power to change you habits for the better.
Write it down
Seriously, make sure your budget is recorded somewhere. Put it in a spreadsheet or in a journal somewhere, but it’s important to have a physical ‘thing’ that is not just kept in your head. You are going to need to keep track of lots of numbers and eventually you will lose track of them if you don’t have them recorded somewhere safe.
What is your reason for having a budget? Write down what you are trying to achieve in the long term. It’s important to know this as it’s what’s going to get you to stick to your budget. When you are planning your budget make sure you look at the bigger picture too – don’t forget to add in future expenses like car payments, insurances and taxes. You don’t want them to come around and throw you off your budget!
Set yourself some spending money
Make sure that your budget includes spending money too. It’s unlikely that you’ll stick to a budget that doesn’t have any room for you to let your hair down once in awhile. It’s up to you how much you want to set aside for this, and how often. You might decide that you’d rather save for a few weeks at a time, then have a mini splurge, rather than setting small amounts aside for every weekend.
When you are making your budget be truthful about what you spend. The budget is going to help you get back on track, but only if you really know what money is coming in and out. Also be honest about what you really need – yes it’s nice to have a fancy gym membership, but if you only gon once a month, is it worth it? Make hard decisions now and you’ll reap the rewards in the future!