Budgeting

Budgeting your finances can be rather difficult and frustrating at times, especially if you have a weakness with compulsive purchases - such as shopping for those new exciting hot items you desire. Realizing you need to set up a budget because you are spending too much is one of the first steps in making a financial change for the better. Many individuals don't come to the realization that they need to set up a budget until they are so deep in debt and are hurting financially to stay afloat. Don't worry if this describes you, I have been there and I pulled myself out. Don't let this situation catch you off guard - act now and recognize you need to be budgeting your finances in order to become financially fit.

After you have realized you need a budget, one of the first and most difficult steps of budgeting is setting up your budget. By setting up a budget and successfully implementing it, you will be able to see some options you can do with your money, such as growing your money (investing), savings, and identifying cost cutting opportunities within your budget. Also from carrying out a successful budget, you will recognize you are a happier person because the financial stress has lifted by tracking your money. And most of all you will be creating new financial disciplines that will last your entire life.

When setting up your budget you first need to gather and write down all your expenses. Write down every reoccurring bill that you have (i.e., rent, mortgage, car payment, insurance, utilities, etc.), and how much you spend on all the other areas in your life (i.e., groceries, eating out, and activities). You also want to write down how much you save each month within an emergency account and for retirement, so you can include them in your budget as expenses.

When you have your list of bills, their amounts, and when they are due - you need to decide how much you will need to set aside for each bill from your income each time you get paid. A little secret that I use is to divide up the amounts of your larger bills based on how many times you get paid each month - for example, let's say your rent was $800 per month and you get paid twice a month; you would set aside $400 from each paycheck so you don't get hit by $800 in one paycheck. When you implement this strategy you will notice that you will not be money poor during the paycheck when your rent is due.

The ultimate goal for your budget is to stay Just Below Budget, meaning not spend more than what you bring home (your income). Budgeting and spending money is a task of self-control every day. You will need to have the desire, dedication, determination, and most of all discipline to become a budgeting master of your money. Remember, if you aren't controlling your money, you are only harming your own financial situation and future.

There are many ways to track your budgeted finances - for example, you can use spreadsheets on your computer, plain paper to write out everything, transaction records, online software programs, and software you can download onto your computer, tablet, or smart phone. There is no right or wrong way to track your finances as long as it works for you and your situation. However, from my experience and millions of others, the budgeting software available today can save you countless hours of your time in helping you track your finances. Many of the software programs are able to sync with all of your bank accounts, retirement accounts, mortgages, loans, and credit cards to help track your finances. With some of the programs you are even able to enter your budgeted amounts to help you stay on track of being Just Below Budget.

With the tools available today, some basic guiding principles, and your determination and discipline, you too can have a successful budget that can lead you to a great financially fit life.

To learn more about me or my blog, and if you have any questions, please visit http://www.JustBelowBudget.com.

Sincerely,
Matt Fedderson