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 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.
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.