Planning a Budget That Sets You Free

Money from planning a budgetWouldn’t it be great to have enough money to live your life to its fullest, while still putting away plenty for a rainy day? Your dream can be your reality. If you’re willing to plan and stick to a budget. A well-planned budget enables you to do the things you need to do. And it also allows you to make the financial decisions that support your happiness and peace of mind.

Direct Your MoneyWith a budget, you direct exactly where each dollar of income is going to be spent. This can help you to spend less on items that don’t fit your priorities. The net result of a budget is that you have more money to spend on the things that really matter to you.

If you think that staying on a budget is difficult, you may be pleasantly surprised. It’s easier than you think. When you plan your budget carefully, and match it to your lifestyle, you can create the appropriate mix of spending and saving to support you in the pursuit of your dreams.

How to Plan the Budget for Your Lifestyle

Live the Life You WantBudgeting does not mean hamstringing your ability to live your life as you want. Your budget will not rob you of life’s adventure and spontaneity. A well-crafted budget, however, ensures that funds are available for instant adventures as well as planned expenses.

Before you create your budget you need to gather your bank statements, bills, and information about how much cash you have available. Don’t forget to include automatic payments like your mortgage, condo fees or rent. Car loans and similar debt repayment should also be included. Once you have a total for your expenses, and another for your income, you can decide how to spend the discretionary dollars left after paying these bills.

Your budget does not need to be elaborate. You create your budget as a hand written document or small spreadsheet on your computer.

The important thing is that your budget helps you to track what you spend against what you planned to spend.

To plan your budget, consider:

  • How much money you have right now
  • What you’re spending your money on – be sure to include the little purchases like coffee and lunches because they can sure add up
  • Where you can cut back – not to deprive yourself, but to control where you money goes
  • What you’ll gain by spending less
  • What you want to save for
  • Your plans for the future – financially and personally as they are intertwined
  • When you know what you want and where you’re going financially, you can create a plan to help you get there. Don’t be afraid to dream big and budget for joy.

    Using a Budget to Meet Your Goals

    Goal SettingWith a budget, you’re more likely to achieve your financial goals.

    Break your ultimate goal down into a series of smaller goals to keep from getting overwhelmed. The sense of accomplishment as you achieve these small goals will keep you moving forward.

    Also, remember that it’s okay to adjust your budget. You don’t have to do everything perfectly from the beginning. Stay organized. Change your budget as you go. The effort to get your finances under control can lead to more monetary security in the future.

    Planning Your Budget

    Budget-Plan-ActionNow that you have an idea of what you want, plan your budget with your significant other, and family if you have one. Ensure that the budget you create supports the pursuit of the things that are important to all of you. Be careful of giving children’s wants too much weight in your budget.

    A step-by-step plan for your financial future together is more likely to be achieved if it’s a joint goal-setting effort.

    Track your spending carefully and precisely. Make sure that your plan that supports your financial goals. Remain flexible. Life happens. Your first budget may need a number of tweaks before it actually works for you. Remember, that budget is the first step to the financial freedom and peace of mind you deserve.

    Keep in mind that this is your budget and you control it. It does not control you! It’s your idea1 It’s your plan! Now it’s up to you to take action.

    Before you spend, ask yourself, “Will this help me get closer to my goals?”

    See the sidebar for our Free Habit Tracker and also our Free Budget Planner.

    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.

3 Replies to “Planning a Budget That Sets You Free”

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