Budgeting allows you to create a spending plan for your money, it ensures that you will always have enough money for the things you need and the things that are important to you. By following a budget or spending plan you will also keep your self out of debt or help you work your way out of debt if you are currently in debt. Budgeting does not have to be hard, it can be one of the easiest things you do all day.
Budgeting is nothing more than make sure you use your money to get to where you want to be in life. For example, you can never retire if you spend every penny you make. If you follow a budget, it will ensure that you can save some money for retirement. It also helps keep track of your expenses to make sure you know where you money is going to.
Where Do I start?
When I did my budget for the very first month, I added up all of my spending from the previous month in different categories to see where my money was going. My categories are rent, electricity, internet, gasoline, groceries, restaurants, pet care, alarm, entertainment / other, cash, gym, and occasionally other things like clothing or whatever I don’t buy every month.
You figure how much you need to spend on things like utilities, rent, other expenses that are fixed or the same every month. You enter that into your budget and subtract it from your projected total income for that month. With the remaining money, you decide how much you want to put into each remaining category. Just don’t spend more than you make, and you’ll be able to save money.
Also, don’t feel like you’re locked into the budget once you make it. You can always subtract from one category to add to another if you need to, as long as you don’t exceed your income. Certain months will have different expenses come up.
Budgeting Made Stupid Easy
At the end of the day budgeting is very simple. I normally just follow these easy steps:
Calculate your after-tax income per month.
Add up all of your “fixed” expenses per month. Rent/mortgage, TV, cell phone, utilities, Netflix, fitness club, minimum payment on credit card debt, student loan payments, etc.
Subtract fixed expenses from after-tax income to arrive at what you will have left over to spend on variable expense such as paying off debt after minimum payment has been meet, gas, etc.
Divide your monthly allowance by 30 days to get your your daily allowance.
Every time you spend money, make sure it is logged “Spent” for that day in your favorite app.
There are many budgeting tools out there. Some people like using one over another for any amount of reasons, such as they like the UI better, they like how it integrates with their bank account, or they just simply like it better and that is that. I have put together a small list of some budgeting tools that can help you make budgeting stupid easy for yourself and your family.
However, I believe that having a more comprehensive list won’t hurt anyone. So therefore I am going to add a few other tools and resources that can help you keep track of your hard earned benjamins.
1. Everydollar- EveryDollar follows the zero-based budget approach recommended by Dave Ramsey, a top personal money-management expert. It is free to use, but some features do require a monthly subscription.
2. PocketGuard– a personal finance information management service, designed to help you track your spending, create a budget and lower expenses. It also has the capability to monitor for potential unwanted and unauthorized charges. This can include hidden fees, billing errors, forgotten subscriptions, scams, and fraud.
3. Clarity Money– uses machine learning to analyze your personal finances and help you make smart decisions about your money
4. Goodbudget– Goodbudget is a money manager and expense tracker that’s great for home budget planning
At the end of the day budgeting is about doing what works for you and your situation. As long as you stick to whatever method you choose is all that really counts. Budgeting is not something you will get over night, but like anything else all it takes is a bit of practice it you will become an expert in no time at all on it. So what are you waiting for? Get Financial Peace Today and start your budget. Yesterday was the best time to plant a tree, the next best time is today. So DON’T WAIT START NOW! GO GO GO!