Four tips for creating a solid budget is a tool that could bring your mind, family, and finances into harmony. It could dramatically reduce stress, and make the challenges of life much more manageable. Take advantage of this tool explained in this article.
The tool is called a budget and it allows you to take control of your finances, instead of your finances controlling you.
Follow the steps below to create a budget that supports your dreams while taking care of the necessities. Just follow these steps to experience peace of mind and excitement about your future:
- List Income and Expenses
Begin by listing all of your regular income, including interest and tips. Next, keep track of every dime you spend for a month. Some items are the same every month, such as mortgage or rent, insurance, loan repayments, etc. This will allow you to establish your starting line. You can get my free Financial Habit Tracker, by clicking on the link on the sidebar.
- Keep Your Chequebook Balanced
This is perhaps simplest and most productive habits you can incorporate into your personal financial success plan. Keep track of everything that goes in and out of your account by writing it in your check register or in a spreadsheet. I use an old copy of a bookkeeping program; nothing too fancy. At the end of the month, compare your chequebook to your bank statement and make any changes necessary.
- Use Credit Wisely and Sparingly
In college, using credit cards can seem like no big deal. Credit card issuers often give special deals and incentives to lure college students into applying for credit they don’t need. With large spending limits and small incomes, credit cards tempted you to live a lifestyle you can’t afford.
Credit, used properly, can provide convenience and peace of mind in knowing that you’re covered in the case of an emergency. But the temptation is great to live beyond your means and worry about paying for those purchases later. The fewer credit cards you sign up for, the less you’ll be tempted to spend away your future financial health.
- Reduce Expenses
There’s no secret to a successful budget. It’s as simple as keeping track of your income and expenses, increasing your income or lowering your expenses until you spend less than you earn, while also saving for a rainy day.
Once you have a good grasp on what you’re spending and where, find places to cut back and put the money you save into a savings account for a rainy day.
The five best places to save money are:
- Restaurants whether dining out or bringing in.
- Hobbies and the related expenses.
- Extra Curricular Activities including memberships and subscriptions.
- Trips for home decor items and similar.
- Vehicles – vehicles are merely transportation. Buy as little vehicle as possible, and keep it until it costs more annually to fix than the yearly payments on a new vehicle. Then buy a 1 – 3 year old replacement vehicle.
- Clip coupons and look for grocery sales. Turn off the lights when you leave the room. Turn the air conditioner off when you leave the house. And cook ahead of time to save on the expense of eating out.
Financial pressures can make all of life seem overwhelming at times. If you implement these simple steps and commit to maintaining a rock solid budget for your family, you’ll experience financial peace and prosperity. Beyond that, however, every area of your life will improve as you’re more relaxed and at ease with the peace of mind you’ve achieved.
P.S. Don’t forget to factor in savings for retirement.
As always, I am not a qualified financial advisor. I just relate financial management to my own experience which may not resemble yours at all. Advice is frequently worth exactly what you paid for it. Most of mine came from expensive experiences.
You’ll be surprised to learn where your money goes each month. This awareness alone may change your spending habits for the better.
When you’re keeping track of what you spend, you may feel less tempted to waste money on impulse purchases. You’ll always know when the money is almost out. This can save you a lot of money on overdraft fees and a lot of headaches.