If you knew of a tool that could help you develop good money habits, bring your mind, family, and finances into harmony, dramatically reduce stress, and make the challenges of life much more manageable, would you take advantage of this tool?
Such a tool does exist. A budget allows you to take control of your finances, instead of your finances controlling you.
You can create a budget that supports your dreams while making sure the necessities are taken care of.
Simply follow these 4 steps to build good money habits, improve your financial situation, and experience peace of mind and excitement about your future.
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Step #1 – Find the starting line for better money management.
The first crucial step in creating a household budget that works is to list all of your income and keep track of every dime you spend for a month. Before you can know where you’re going, you have to know your starting point.
You’ll be surprised to see how you’re spending money and learn where your money goes each month. This awareness alone may change your spending habits for the better.
Step #2 – Use credit wisely and sparingly.
In college, using credit cards can seem like no big deal. Credit card issuers often give special deals and incentives to lure college students into applying for credit they don’t need. With large spending limits and small incomes, credit cards tempted you to live a lifestyle you can’t afford.
Credit, used properly, can provide convenience and peace of mind in knowing that you’re covered in the case of an emergency. But the temptation is great to live outside of your means and worry about paying for those purchases later. The fewer credit cards you sign up for, the less you’ll be tempted to spend away your future financial health.
Step #3 – Keep your checkbook balanced.
One of the simplest and most productive habits you can incorporate into your personal financial success plan is to maintain a balanced checkbook. Keep track of everything that goes in and out of your account by writing it in your check register or in a spreadsheet. At the end of the month, compare your checkbook to your bank statement.
When you’re keeping track of what you spend, you may feel less tempted to waste money on impulse purchases. You’ll always know when the money is almost out. This can save you a lot of money on overdraft fees and a lot of headaches.
Step #4 – Reduce expenses.
There’s no secret to a successful budget. It’s as simple as keeping track of your income and expenses, increasing your income or lowering your expenses until you spend less than you earn, while also putting money in an emergency fund for a rainy day.
Once you have a good grasp on what you’re spending and where, find places to cut back and put the money you save into a savings account for a rainy day. Clip coupons and look for grocery sales. Turn off the lights when you leave the room. Turn the air conditioner off when you leave the house. And cook ahead of time to save on the expense of eating out.
Financial pressures can make all of life seem overwhelming at times. If you implement these simple steps and commit to maintaining a rock solid budget for your family, you’ll experience financial peace and prosperity. Beyond that, however, every area of your life will improve as you’re more relaxed and at ease with the peace of mind you’ve achieved.
Planning a Budget that sets You Free
Wouldn’t it be great to have enough money to live your life to its fullest, while still putting away plenty for a rainy day? You can turn this dream into your reality, if you’re willing to plan and stick to a budget. A Financial pressures enables you to make financial decisions that support your happiness and peace of mind.
With a budget, you see exactly where each dollar you earn is being spent. This helps you spend less on items that don’t fit your life’s priorities. As a result, you have more money to spend on things that really matter to you.
If you think that staying on a budget is difficult, you may be pleasantly surprised. It’s easier than you think. When you plan your budget carefully, you create the right mix of spending and saving to support you in the pursuit of your dreams.
Personal Finance 101 – How to Plan Your Budget for Financial Solvency
Contrary to popular belief, planning a budget allows you to experience more of the fun things in life. Many believe that sticking to a budget robs them of life’s adventure and spontaneity. A well-crafted budget, however, ensures that funds are available for instant adventures as well as planned expenses.
The first step in creating your budget is to gather the things you’ll need. Among them are your bank statements, bills, and information about how much cash you have available. It’s also helpful to know how much you’re spending on necessities like food and gasoline.
The budget you create can be as simple as a hand written document or small spreadsheet on your computer. The important thing is that the budget helps you to track what you spend and keep your financial life organized.
To plan your budget, consider:
- How much money you have right now
- What you’re spending your money on
- Where you can cut back
- What you’ll gain by spending less
- What you want to save for
- Your plans for the future
When you know what you want and where you’re going financially, you can create a plan to help you get there. Don’t be afraid to dream big and budget for joy.
Using a Budget to Meet Goals
With a budget, you’re more likely to achieve your financial goals. Break your ultimate goal down into a series of smaller goals to keep from getting overwhelmed. The sense of accomplishment as you achieve these small goals will keep you moving forward.
Also, remember that it’s okay to adjust your budget. You don’t have to do everything perfectly from the beginning. The effort to get your finances under control can lead to more monetary security in the future if you stay organized and adjust your budget as you go.
Plan your budget with your significant other, if you have one. Ensure that the budget you create supports the pursuit of the things that are important to both of you. A step-by-step plan for your financial future together is more fruitful if it’s a joint goal-setting effort.
Track your spending, commit to a plan that supports your financial goals, and remain flexible. Your first budget may need tweaks, but that budget is the first step to the financial freedom and peace of mind you deserve.
Getting Yourself Out of Debt & Staying Debt-Free
Do you feel like your credit card debt is insurmountable? The good news is that, no matter how high the mountain appears, you can climb it and pull yourself out of the metaphorical hole you may find yourself in.
Here are some good money habits to tackle that debt and bring it down to size:
Only buy what you can afford.
The best way to keep debt from becoming a problem is to avoid the problem altogether from this point forward. Rather than splurging on a fancy piece of electronic hardware, just wait and save up for it.
By staying within budget and paying off your bills every month, you don’t need to worry about debt piling up on top of you.
You can still get out of debt and feel the sweet relief of being debt free by changing your mindset from “having it now” to one of enjoying it even more when you have the money.
Pay off the lowest balance first.
Financial advisor Suze Orman often advises people in debt to take care of the higher interest debts first. That the best way to get out of debt fast. In general, this is a good way to go. However, if you have a credit card with a balance of only a couple hundred dollars, it would also be beneficial to knock that one off right out of the gate.
You can eliminate a whole payment, save on interest charges, and put that money towards another bill.
Prioritize bills by interest rate.
In the long run, paying off the higher interest cards first will save you the most money. It’s usually the interest that keeps knocking you back. By taking out the higher interest cards, you’ll feel a greater sense of progress when paying your bills every month.
One of the more overwhelming aspects of being in credit card debt is constantly being reminded of it with so many bills from different cards. One way to fight back is to consolidate your debt. You can do this by either taking out a loan from a bank or transferring the balance to another card.
If you recently got a new credit card, you can transfer a portion of the balance to that. This will save you a bit of interest since most cards will put that balance under the introductory rate.
If you take out a loan, you can pay off several of the cards and reduce the amount of mail you receive. It’s less daunting psychologically to receive one big bill as opposed to a bunch of tiny ones.
Convert to cash and debit only.
One of the best ways to keep yourself in debt is to keep using your credit cards. They’re convenient and it’s easy to justify their occasional use by saying that it’s only a soda or a tank of gas.
Those tiny charges add up quick! A dollar here, a few more there, and you’ll negate the payments that you’re making in a very short amount of time.
Paying with cash will help you develop new spending habits. By the time you get your debts paid down, you’ll have disciplined yourself to the point where you no longer put yourself in that situation.
Debt is a problem that happens to nearly everyone at some point. Even wealthy people find themselves overextended by debt.
Even if you’re working on a shoestring budget, it’s possible to pull yourself out of debt. With discipline, focus, and hard work, you can find yourself relieved of the mounting pressures.
Saving Money Made Easy
Do you struggle to save money? At the end of each month, do you wonder where all your money went? Perhaps you spend beyond your means?
If so, keep reading! Discover how saving money is as much a product of the mind as well as your financial habits. And speaking of habits, you’ll see how small positive changes, turned into good money habits, can automatically add up to big savings!
Consider these good money habits and ideas that can transform your life!
Track your spending.
Record every penny you spend for a month. Divide your spending reports into categories, such as restaurants, groceries, entertainment, clothing, house payment, utilities, and other categories. You might be surprised to learn where all your money went!
At the end of a month, analyze your reports. Identify areas where you could cut down. Next month, cut down on those expenses and put the money you saved into your savings. Work on developing good spending habits that will last a life time.
Clarify wants versus needs.
There are certain things in life that you need to survive, such as food, water, clothing, and shelter. There are also the things that you want. Learn to differentiate between the two and you’ll automatically make some choices that will save you money.
Buy only what you can afford.
You may think that you have to get every new gadget and gizmo available, but if you cannot afford it, the financial struggles they cause will outweigh the enjoyment that you receive from them.
Consider using the cash envelope method of planning for your spending. Divide your expenses into categories and use a different envelope for each category. With each paycheck, divide out your money into the various envelopes.
Spend only the money that you’ve planned for each category. Once the cash is gone, it’s gone until more money can be added to that envelope.
You may want to save for a few weeks to get enough cash in your envelope for a desired purchase, at which time, you’ll know that you can afford it.
Do you really need that expensive car?
If you’re struggling each month to repay the high-interest loan that you had to take out to pay for your car, perhaps you’ll want to rethink whether you need such an expensive car.
In some situations, you might need an expensive car. For example, if you’re a real estate agent and you take clients to look at high end houses for sale, an expensive, luxury car might help you make sales.
On the other hand, in reflection, if you bought the car to impress the neighbors, you might feel that the additional expense and resulting financial struggles aren’t really worth it. If this is the case, a downgrade to an attractive, less expensive car may work better for you.
Consider what a car is really for: to get you from one place to another, usually for short jaunts within your city. A less expensive car can get you there as well as a high-end car. Plus, you’ll have the extra money to do with as you please.
A smaller home can save tens of thousands of dollars on the purchase price and monthly payment, plus costs for maintenance and repairs are less. Even if you rent, a smaller place will likely cost less.
Imagine the amount of money that you could save with a smaller house! All this money can then be used for other things that are important to you, like vacations or to add to your savings for retirement.
Downsizing is an important decision that only you can make. Decide what’s more important to you – the larger house or the savings. For example, you might need extra room because you frequently have guests. An office space might be vital to the success of your business.
Figure out if downsizing might work for you and, if so, go for it!
Figure out ways in which you can enjoy life while still embracing money-saving habits.
Money does not dictate how much you enjoy life. Remember, it’s not the material things in your life that matter most, but rather your friends, family, and the cherished times you have with each other.
Research shows that the experiences in our life bring greater happiness than material items.
For example, instead of going out to dinner and a movie, invite your friends over for a raclette dinner party and movie night at your house. You can still enjoy a rollicking good evening together while saving money. You might even enjoy it more than sitting in the restaurant and theater!
There are many other ways to substitute something less expensive and still have fun, like game night, sports (playing volleyball, basketball, baseball, football, soccer, bowling), card games, going camping or to the beach, and more.
Create your own list of fun stress relief activities that won’t cost lot of money. Invite your friends to do the same and then choose those activities whenever you want to get together. You’ll all have fun and save money too!
Adopt some small, financially savvy, good money habits
- Save first. Automatically have a small amount of each paycheck deposited into your savings. You won’t miss what you never see!
- Let your money work for you. Invest regularly so that money will grow by itself into more money! Over the years, this can add up to many thousands, or tens of thousands, more than what you put in.
- Cook at home most of the time. Saving money by cutting down on fast food and coffee runs will add up.
- Buy when things are on sale. Try to avoid ever having to pay full price.
- Use free or streaming services for watching television. You can likely get the entertainment you want for a much smaller price and pocket some substantial savings.
Developing good money habits and saving money doesn’t have to be a burden. Try these tips and you’ll find that you’ll actually have more money for the things you really want in life!