Are you budgeting ? Your budget is your eye on your finance. Budgeting help you to see where’s your money is coming from and where’s it’s going out. This should be your first step to see how your personal finance are doing and the first step if you are trying to get back on the right track from spending too much. If you want to save more money it will help you to know where’s you are spending too much.
Budget like you want to do it
I think everyone should make a budget, but you should budget the way you like to do. There’s not only one way to do a budget. Some are budgeting for a month or year or some like me are budgeting only the money I have in my possession and wait until I receive more money to budget it. Find what method is the best for you. You can use a software, spreadsheet, web base budgeting tools, pen and paper. You can try multiple method and technique to find the one that you will stick with it for a long time no matter what others are saying. Personally, I am using YNAB and I love it, but the software is only for budgeting money you have so if it’s not your budget style don’t use it.
Budget are flexible
A budget is modifiable. Unlike a lot of persons think, a budget should always be modified to represent what you are doing. You’ve got more money ? You’ve got an unexpected expense ? Don’t panic and modify your budget to make it represent what you need to do with your money. In that way, you will have a true budget that represent your real situation and you will continue to budget since you will not feel under pressure from seeing a budget that’s not your reality.
You should budget your debt repayment first and your saving so in that way your debt get paid without being late and you pay yourself first as describe in this old post. This will save you some interest and late fee and your saving will growth before you have spent that money for fun or something you don’t need.
Analyze your old budget
Every couple months you should look back at your old budget and see if you can cut somewhere to save more. The budget will help you to see if you are spending too much on dining out or on some activity. This is your choice where you save money. If you find the amount reasonable and you couldn’t live without doing the activity just keep it and look somewhere else to cut. This way you will keep having fun and keep using the budget without saying that it dictate your life too much.
Budgeting can be overwhelming
If you find budgeting is overwhelming, you can stop doing it for a little time and start back latter. I did that when my kid was born and I was feeling that I didn’t have time to budget my things, but I’ve found myself spending way too much on things that I didn’t need and stop I’ve stopped investing. Now, I came back to budgeting my money and I know that I will continue to do it since I saw what I did wrong when I didn’t budget like overspending.
Readers: are you budgeting ? If yes, what is your method to do it ? If not, why ?