• Lower your monthly payments
  • Reduce stress and live your life
  • Avoid personal bankruptcy court

Some Tips on How to Create a Great Budget

Picture this, you have decided to set some sturdy financial goals; you have created a strict budget that allows for your rent and Mister Noodles. Then after a couple of days you come to the conclusion that you cannot live off of Mister Noodles alone; you start to miss things like meat and potatoes, the next thing you know you are sitting down to a steak dinner and ….wham…. your budget is broken. Sometimes people need to create a great budget in order to cover every aspect of their financial needs, no matter if they think they are doing all right with saving their money; there can be emergencies that pop up that they are not prepared for.

Create a Great Budget

Using Your Goals to Set a Budget

Many people do not know where to start when they want to create a great budget; it is very simple, start with your goals and continue from there. Some examples of goals that could be used to create a great budget are the following:

  • Pay off mortgage
  • Pay off car loan
  • Pay off credit card debt
  • Save for emergencies
  • Pay off student loan
  • Save for a vacation
  • Save for my children’s education

When you want to create a great budget, you must first budget in your needs; then you can distribute the rest of your income to your wants and goals.

A Realistic Budget

Many people tend to spend more than they can afford too, others tend to save more then they should. They usually realize this when they are standing in line and they cannot get what they want because their transaction was not approved, or the dreaded overdraft on their bank account…yikes! For some people this happens a few times before they realize that they need to create a great budget, or any budget for that matter. Even those people who have a healthy income have to realize they are not the richest people on earth and should not spend their money as if they are.

Having a ‘Budge’ in Your Budget

Creating a super strict budget is a huge mistake that is commonly made by people. The determination to get to your financial goals is there, but creating a budget that is tighter than a pair of spanks is not ideal; nor will it allow you to have some fun, and who does not like a little fun in their life!

We all have times in our lives that we look at something and think ‘oh…… I want that so much.’ This is where the budge in budget comes in; if you plan a splurge, or save for something you really want then it will avoid the overspending and destruction of your plan.

Know the Areas That Are Problems

You need to know where all your money goes, and for some people they can pick out where their problem areas are. Places such as a used clothing store, the large supermarket that has everything but the kitchen sink, or bulk discount stores, could be considered problem areas because people tend to overspend in these places. Sometimes it can be the small amounts spent here and there that are problem areas too. There are people who go from store to store for the sales, and while spending more money on gas to get there it is not ideal for their budget in the long run. In order to create a great budget you need to determine what expenses are really needed or not, too many problem areas can bust your budget wide open and ruin your goal you have set for yourself.

Thinking beyond the Month

For most people their budget is done from a monthly basis, but they also need to remember their annual payments in their budget as well. Yearly memberships and insurance premiums are payments that often get forgotten until they are due. For some the holidays are the budget busters because they are not a part of the budget or saved for. In order to create a great budget you need to factor in all of these expenses as well as any other expense that is not monthly.

In The End

Budgeting is a constant learning experience, on one hand you do not want to be strict, but on the other hand you do not want to be spending all ‘willy-nilly’ either. You should always make sure that you have an emergency fund set up because just like the term ‘emergency’ suggests there are always unexpected things that pop up; like the tow you needed because your tire broke in the middle of nowhere. We all make mistakes that we have to learn from, financial mistakes are no exception, it is ok to get frustrated with your mistakes, just hang in there, and do give up you will make it work.

Budgeting – The First Step towards Financial Independence

Have you ever thought or dreamed about how it would be like if for instance one day you wake up and you realize you are financially free? You are under no debt; you have a nice mount of savings for any type of emergency and you are building your retirement plan well? That would feel like being on top of the world. Like you have no worries left to tense yourself up to. Nothing is impossible in this world and there are ways to alter the impossibilities. If you want this dream to come true, then budgeting is the way to achieve it.

Why a budget

Why a budget is critical:

Why a budget is critical is a good question. Mainly because it helps you secure your future. But budget is a word that frightens most people and makes them believe it is a strick routine of cutting of every desirable thing from their monthly expenses. It’s really not like that and shouldn’t be thought negative of. Sticking to a budget is hard but once you do eventually it will lead you to a peaceful financial independence. A budget should be a part of every person’s life and should have a vital importance.

Every Little Penny:

The first thing you need to do is note down all of your expenses of a month coin to coin. This should involve everything whether it’s random that changes like every month or week or fixed costs like mortgage, car and bill payments.

Arrange your Expenses into Groups:

When you realize where you are spending your money divide it into different categories and groups like transportation , food , bills, clothes, medical, and of course savings. In this way you will know in which category you are spending most on and you can easily see from this where you are going too high.

Start Cutting down:

The next step for you is starting to chop down things from your list. Fixed things like bills can’t really be changed but you can try to some extent like starting to use public transport more often or ridesharing. Food expenses can be cut down by using special offers, sales and coupons. Reduce your entertainment expenses by eating out a bit lesser watching a fewer movies out and try to visit the club lesser. Cut down things from almost every category or group you have made. If you just start randomly without any planning it will just create a mess and you might start reducing wrong things. So be wise and have a thorough look first. By cutting down some things in life which we are using an excess of really help you a lot. In the start you might feel like cutting down has made you poorer but that’s not it. It’s for your own good your future.

Sticking to your budget:

Sticking to a budget and following it is not really a piece of cake. You must mean it and take it seriously in it order to stick to it. There are some things which you can follow that can make you follow your budget and also save you from the later pondering on why a budget was needed for us when we can’t go with it.

Here are some tips to stick to your budget:

  • Some families turn the whole budgeting thing into a game. They set up a goal for a week like using only $100 for their groceries, when they reach that goal they celebrate it as an achievement.
  • You can also give out some small prizes for family members that think of different ways and come up with the best suggestions for reducing costs and sticking to the made budget.
  • Reward yourself when you feel like you’re sticking to the budget. This doesn’t mean a heavy prize or something but a family night at the cinema or maybe a DVD together at home.
  • Keep your spirits and hopes up and try to be optimistic. You are not favoring anyone than yourself and your family.  This whole plan is for your future.

Dealing with Debt:

Debt might be thought of as a fixed expense but in real it isn’t. There are ways to save thousands of dollars by appropriate debt settlements. Once all of your unsecure debts are settled down you will get a payment plan which will be even less than the total of the monthly payments you have at present.

Financial Independence:

Now you know why a budget is important for you. Create one for yourself and see the difference in increase of your savings. Control your expenses, get out or reduce every debt you are under think before buying things whether you need them or not. Soon you’ll realize yourself that you were over spending and that the budget you made help you get independent financially.