Budgeting

Are you finding it difficult to start budgeting? Or beyond that to keep doing it? There are many reasons and excuses for not working on a budget. Here are 3 Budgeting Tips For the Financially Challenged.

1. Dedicate Time

Ninety percent of being successful with a budget is in just actually doing it. Working on your budget. You want to get to the point where looking over your budget just becomes routine. You routinely pay bills. At least I hope you are. Then make it a habit to routinely work with your budget too.

Try to commit to looking at your budget at least once per week. Look it over to make sure everything is in order. Make corrections where necessary. If you made a purchase that was not taken into account by the budget, then figure out how to incorporate that purchase into the budget.

2. Keep It Simple

As with anything that is new or challenging, keep your budget simple. Do not go overboard with fancy spreadsheets in 10 different color inks. Don't waste time with fancy computer software programs that you will never completely understand. Why build an Excel spreadsheet with 20 tabs all referencing other spreadsheets that would take a mathematical genius or your tax preparer 10 years to figure out.

I always say that the simplest and best budget for the financially challenged is good old pencil and paper with a good eraser. That's it. You can write-up a nice budget with this method. It worked for your great-grandparents. It will work for you too.

Also, once you have created the budget, continue to keep it simple. Don't add 300 buying categories to the sheet. When you only use maybe 20 to 30 categories tops. Unless there is a good reason to track beauty products separately (maybe you think you are overspending in this category) then just lump it in with your grocery category. Or Pharmacy category. No need to break it out unless you really need to track that expenditure at a deeper level.

3. Spend Less Than You Make

This goes along with the "keep it simple" theory. Spend less than you make. Sounds simple. But this is what trips up many people with and without budgets. But get this one tip right and you can guarantee that you will stay out of debt. Accurately track how much income is coming in on your budget. Then accurately calculate how much you will spend. If your spending is more than what you bring in, then readjust the budget so that your expenses are lower. And commit to not buying anything beyond what is on the budget. If you don't have the money, which means you don't have the cash, you cannot afford it!

So dedicate some time every week to budgeting, keep it simple, and spend less than you make to erase debt and build wealth.