4 Budgeting Basics
To some, a budget might sound very "corporate” or “office-y," but in reality, it's a wonderful tool to help you get where you want to be in life financially whether you’re an individual or a business.
It's all about how you define a budget. Instead of seeing it as a boring pastime meant to deprive you of any fun, you should see it as a way to control the money you spend 40 hours a week for.
Ask Why You Should Use a Budget
Take a few minutes to create a list of the top ways implementing a budget could help you reach your financial goals. These list items should be ones you connect with emotionally, because if you're to ever persist, you need more than an intellectual reason for adhering to a budget for any period of time.
Choose a Budgeting System
We each have different styles for doing things, and this is certainly true when it comes to our money. Since there are numerous types of budgeting systems out there, it's important to research and choose the one that works for you.
Senator Elizabeth Warren and her daughter Amelia came up with the 50-30-20 rule, which puts your spending into three categories:
- 50% Fixed living costs
- 30% Fun stuff
- 20% Retirement & debt management
While this seems overly simplified, it's a very easy and practical way to make sure you are living within your means, not depriving yourself of fun, saving for your future and, most importantly, making sure you pay yourself first.
Track Your Spending
There are several ways to do this, whether you use pen and paper or track it online. The point is to see exactly how you're spending your income. There are plenty of free apps out there to aid you with this process. Here are just a couple:
- Mint is a free website and app that monitors your accounts and what your money is being spent on. You can even create budgets with it.
- Mvelopes is another free app that uses software to imitate the envelope system. It tracks your bills, manages your budget and helps you plan ahead.
Start Small and Get Creative
It can sometimes feel overwhelming to adapt to a new way of budgeting your money, but keep in mind you don't have to take on too much at once. Instead, try implementing a new budget in just one part of your spending to get a feel for how it will work for you, and then slowly apply it to the rest of your spending over a period of time. Get creative with new ways to save and put that extra money towards paying off debt, saving for retirement or even treating yourself to something fun like a shopping spree or a vacation.
When You Need More Than Just a Budget
If you’re like many Americans, you may be struggling to pay your bills on time or eliminate credit card debt whether or not you have a budget. There's certainly no shame in that; we all do what we can to get by and provide for ourselves and our loved ones.
The good news is that there are a few simple and easy ways to help you when you can't seem to catch up with your many financial demands. For qualified California residents, Fast Auto & Payday Loans could provide cash amounts up to $255 with their payday loans. To get started, you simply need to ask yourself which style of money management is right for you and your lifestyle.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.