Creating a personal budget for your income and expenditures can dramatically transform your finances, save you from severe debt issues and make you in control of your money.
According to statistics by Gallup, one of every three Americans prepares a household budget and only 30% of the American population prepares a long term financial goal. Little wonder a lot of people still live below their means. The challenge is that many people do not know how to go about personal budgets. They believe budgeting starts when you begin to earn in thousands or tens of thousands.
The truth is, you do not have to earn so much before you learn the art of budgeting. With the few bucks that come in monthly, wisdom requires that you make a budget of your expenditure. If not, you will spend money on things you never planned for and the money will never be enough. Understanding personal budgeting is something that too many people have difficulty with. There is definitely no doubt about that.
Subsequently, many people, including myself, are not educated enough about finding debt relief through a proper and well managed personal budget plan. However, following a strict budget each month or week is one way that provides a debt-free life and happy living. You might need to try out some of the methods I recommend in this post for a well-structured personal budget. No doubt, this is the best way for everyone to improve their debt condition.
Now, this is something you should already start thinking about: how to manage your money properly and be consistent with it. This will drastically pay off down the road.
- What is Money Management?
Money management is the process of budgeting, saving, investing, spending your income in a more structured manner. If you do not understand how to manage your money, no matter how much comes into your pursue every month, it would never be enough for you to do the things you want to use the money for.
Truthfully, money management through budgeting will help you earn well, save better and enjoy your life without all of the mental stress that comes along for anyone overloaded with debt.
Your budget will make you see the possibility of surviving on a fixed income and expenses every month. In addition, budgeting will help you potentially have a little bit of extra money each and every month! How fabulous would that be? You know you want to be debt-free and you are exhausted thinking about your debt.
Rather than wallow in the mire of your debt, why not take action to create a budget plan today. You can craft out a budget plan for yourself that you can follow through always. Learning about managing your money by following strict budgets will surely pay off for you.
Financial discipline is about controlling and regulating your spending by paying for what you need to pay and saving or investing the rest.
Controlling one’s expenditures is a difficult task for most people. If you can’t keep track of your expenditures, no amount of money you earn will ever be enough. Our desires as humans are to always spend whatever money we have. As a result, everyone needs to keep track of their spending.
Being able to keep track of your spending is the discipline you need to be debt-free. It’s the ability to say no to purchases you’d typically make suddenly without prior plans. These spontaneous purchases are the biggest cause of people failing to stick to their budget. However, you can set aside a monthly budget to accommodate impulse purchases, but make sure you do not go over that amount.
Preparing your budget before the start of the month will allow you to identify future financial issues and take steps to solve each one. Let’s say your budget shows a $150 shortfall for the coming month. This is because you developed a budget before the month began.
So, you have the option of either eliminating those items from the budget or devising a means to generate additional money to meet the shortfall or both.
It is critical to prepare your budget prior to the start of the month. Keep in mind that discipline is a talent that can be learnt just like any other.
MAKE MORE MONEY TO BE DEBT-FREE
Of course, it’s easier said than done. But, it is possible and realistic to make more money either you run or a business or work in an organization. We often do not know how to manage our budget to become debt free because we have not learned how to increase our income.
Firstly, being exceptional on your job would provide you with the leverage to negotiate a salary raise with your manager. Keep being at your best and you will become almost indispensable at your job. Also, learn to offer value. People would not pay you more for what you do or sell to them. They pay more because of the value they derive from what you do and offer.
Offering values work hand-in-hand with excellent delivery. Whether you offer goods or services, how you package your business with an excellent touch will determine if people will pay you more or less.
Is there a chance for a side hustle? Do you always have nights and weekends off, and would your boss mind if you took on part-time or occasional work to supplement your income? Perhaps a friend works in catering, landscaping, house painting, or any other field and might use a helping hand again and then. Is it possible to turn a pastime into a source of income?
Crafty people can sell their items online or at flea markets and craft festivals. Suppose you have a knack for history and public speaking. In that case, you will make more money by giving talks or conducting seminars on the subject. Animal enthusiasts can provide dog-walking services. Where there’s a passion, there’s often a way to earn income.
START YOUR PERSONAL BUDGET PLAN TODAY
Nevertheless, there is no time you can’t start planning your budget. For every income you receive in a month, learn to set apart a particular percentage for saving and expenditure. For example, suppose you earn $1,000 every month. In that case, you can save up 10% of your income, 80% for necessary expenses (home, clothes, transport and food), while the remaining 10% will be for miscellaneous.
In conclusion, debt is your worst enemy. So, if you can do anything to prevent this from occurring, start early to figure out how you will follow your budget strictly each month and make it work for you.