Cover Cheesecake
Budgeting 101 Take Control Of Your Money
Let the Budgeting Begin
Budgeting is a lot like dieting almost everyone has tried to do it before, but most people fail to stick with their plans in the long term. Why is this, and do these trends mean that youll never be able to stick to a budget yourself?
Why Budgets Fail
The truth is that most budgets fail for the same reason that most diets fail theyre too restrictive. Telling yourself that you wont spend a dime on coffee ever again (despite a twice-a-day Starbucks habit) is a lot like saying youll never eat another piece of cheesecake. Eventually, you begin to feel deprived and lose the resolve to stick with your budget.
To succeed with budgeting, you need to have a balanced approach. A good budget keeps you within your means and allows for some fun money, like observing healthy eating habits keeps you at a healthier weight without dieting. In the following steps, well look at how to set up a budget that works for you.
Step 1 Gather information
Its tough to plan a budget when you arent familiar with how much money is going in and out of your wallet. This is why most financial planners recommend recording every expenditure over a week’s time before creating a budget. An easy way to do this would be to get a small notebook and record every purchase, from groceries to utilities, sundries and other small things like soda or gum.
The longer you carry out this information gathering task, the more information youll have to use in this step of the budgeting process. If you can, try to go a whole 30 days so that you can see how your familys spending fluctuates over a month.
Step 2 Analyze the information
With your notebook in hand, its time to analyze where your money goes each month. To start with, categorize each expense in your notebook, like “Mortgage/Rent,” “Clothes,” or “Medical Expenses. If youre having trouble coming up with a list of categories, do an internet search for a budget worksheet you may even be able to find a free version you can download to your computer to organize your expenses more easily. Once an expense is categorized, total them up and see the percentage of total expenditures each category occupies.
Step 3 Making Decisions
When youre finished analyzing your financial information, youll notice one of two possible patterns either youre spending less than you make or youre overspending, based on your current income.
The worst of the two outcomes is spending more than you receive in income. If that is the case, you need to spend less or make more, as relying on debt to cover excess is not a viable approach over the long term. However, cutting your expenses may not be as difficult as you think. Reduce the number of times you eat out, spend less on new clothes or beauty services, look at cell phone and cable plans and check you aren’t paying for more minutes or channels than you use are three good ways to trim excess from your budget.
Finally, dont forget to leave a little wiggle room in your budget to accommodate the occasional fun purchase. Put a few dollars from your paycheck into a separate account for anything that happens outside your budget. And give yourself a break you may stumble occasionally, but with continued diligence, you will eventually meet your financial goals.
Cheesecake – Breathe dance cover (Miss A)
