Five Steps to Budgeting Success
Successful budgeting is key to good financial health and it really isn’t hard. It just takes some thought and time. To help you get started with your budgeting just use this simple budget worksheet.
These five steps will help create a budget that’s realistic:
List your expenses Make a list of your fixed expenses such as mortgage or rent payments, car payments, insurance payments, etc.
After that, make a list of your fluctuating and periodic expenses expenses. These include expenses for dining out, dry cleaning, hobbies, and other bills or expenses that don’t have a consistent payment.
If you are having trouble with identifying all of the ways you spend money, take time to review credit card and bank statements or check registries to help you calculate estimated figures for these expenses. This is vital successful budgeting.
Separate your wants and needs After you have made your lists and can see where you’re spending your money, check your lists for places you can cut or eliminate costs. Look out for "money leaks". Money leaks are those small things you spend money on that is specifically planned. You are likely to find $40 to $50 a month in unplanned spending. This is especially important to eliminate debt or save money toward a specific goal. Any place where you see you’re clearly wasting money, get rid of it.
Make sure your expectations are realistic The objective of a successful budgeting is to help you plan for actual expenses while at the same time setting goals for spending that will allow you to save money. So one thing you can do is either set or review your financial goals with our simple worksheet.
Consider using budgeting software Part of the reason you do this is, of course, for guidance in successful budgeting. It helps you understand the expenses categories and helps you map out strategies for successful budgeting. Another part of it, though, is psychological. By investing in budgeting software, you mean business when it comes to your budget and saving goals. You can create a budget for free with Mint, Personal Capital or Penny.
Get your family on board For the most successful budgeting possible, everyone in your family needs to know and understand the budget. It won’t do any good to create a budget if your husband or wife isn’t aware of it and continues to spend money in ways you haven’t planned for or on things you haven’t made allowances for in your budget.
And it’s never too early for kids to develop money skills and to know that there are limits to how much money you can or will spend. So the earlier you get them started, the better.
