budget 101

For many of us the word budget cannot be found in our vocabularies.  Some have never created a budget and some have created it but don’t stick to it.  The main reason is because it’s too restrictive.  We begin to feel deprived and resort to impulse buying which defeats the purpose of  a budget.  Controlling our money allows us the freedom we need to enjoy our lives without guilt.

 

Here are my top 5 tips to creating a beginner budget:

  1. Know what you earn!  You would be surprised how many people don’t know how much they really make.  Before you decided what goes out, know what comes in.
  2. Track your expenses for 30 days: Before creating your budget you must track your spending habits.  Keep receipts and enter them in your phone app or a notebook. Some banks also has automatic tracking built into their online banking systems.  At the end of the month you should be able to tell what kind of spender you are.  It just may be what you need to shock you into action.
  3. Create a basic expense budget. Mine looks like this:  tithes, savings, food, lights, and auto. You can enter the extra expenses after these categories have been filled.  Life will be a lot less stressful once your basic needs have been met.   After all, how can you enjoy your hobby if the lights are off?
  4. Automate savings. Have money transferred directly from your checking to savings account.  I prefer to keep my savings at a separate bank so I won’t have easy access to it. By keeping your savings at a different bank, you won’t be tempted to withdraw the money.  Remember no amount is too small, just get into the habit of saving.
  5. Reward yourself.  Feel free to enjoy some things as long as it’s in moderation.  Pickup a new hobby or resurrect an old one but just remember to keep it within budget.

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Rho'Nesha