Learning how to Budget Money
As we grow from children through the teenage years and into young adults we are taught many things, both from our parents and through school, but the one thing the vast majority of people are never taught is how to budget money. Unfortunately this is the one skill that everyone needs to know. Keeping a proper budget and tracking what your money is doing is the best way to stay out of debt and build wealth.
Money is a powerful tool in life, if we learn to make it work for us. Most people work for their money but once they have it, in their paycheck, more often then not they do not keep track of it once it hits their checking account. Writing down expenditures in the check book register is not keeping track of your money because once it is written in there it is never looked at again.
Learning to budget your money is an important step in your financial health. Once you have written down your income and expenses you will start to see where you money is going and some of it may surprise you. It will be the small expenses that add up the quickest. Spending five dollars on lunch everyday, or that morning coffee you get on the way to work can add up to several hundred dollars a month. That is money that could be doing more good if used more wisely.
Let’s put some math to that. If you spend 5 dollars for lunch a day during the work week that’s $25 a week or $100 a month, give or take $5. Over the course of a year that’s $1200 spent on lunches. If you start adding all the other small expenses that occur every month before long you may find you have enough to pay off any debt you may have but also start saving towards a healthy financial future.
The first step to learning to budget money is writing everything down. Start with you monthly income and write that down at the top of a piece of paper. Now you know how much money you have to spend through the month. Start figuring up all your monthly expenses. This includes everything from your mortgage and utility payments, car payments, credit cards on down to the smallest expenditures. Write these down keeping them in specific categories. Subtract your expenses from you income and see what’s left.
This is your first budget because it shows you what your money has been doing every month. Now that you do indeed have a budget you can look at it becomes much easier to not only see where the money is going but also take back control of where the money is going. And when that happens you can start to set goals, both short term and long term, for your money.
It will take some time to get your money budget dialed in. Most people say that if they stick with it they start to get a firm grasp on their budget and money situation in about 3 months. If you never learned to properly budget money the best way to get started is to just get started.
Andrew Bicknell researches and writes on a variety of subjects. For more information about learning to budget money please visit his website Household Budgets at http://household-budget.home-choices-net.com
7 Tips for Creating a Family Budget
For many people creating a family budget is an exercise in frustration. Where to start, how to set it up, should I use budgeting software? Are all questions that nearly everyone asks? And then when they do get it set up and start tracking the money coming in and the money going out something happens. An emergency or an impulse buy that screws the whole thing up.
Unfortunately the majority of people give up on their family budget before they ever give it a chance to do what it is supposed to do. One thing everyone needs to understand is that a budget is not a rigid thing. It is flexible and needs to allow for those unintended purchases or emergencies that life is full of. And if you stick with it before long it will be a cash flow planning device you cannot live without.
That’s all a budget really is, a cash flow plan for your money. That’s right, your money, which should be working for you, not the other way around. A budget allows you to track your income and expenses, giving each dollar a task each and every month. This gives you a good picture for paying bills, setting aside savings, and planning for the future.
If you are having trouble creating a family budget here are 7 tips you can use to make the process easier. Get a piece of paper and list out income on one side and expenses on the other.
1. Calculate your monthly income by gathering three months worth of pay stubs and averaging the monthly earnings.
2. Figure out your monthly bills by averaging the last three months worth. Do this for expenses such as rent, mortgage, utilities, phone bills, car payments or other fixed monthly expenses. You can also do this for those monthly expenses that move up and down from month to month such as credit card bills and groceries.
3. Subtract your monthly expenses from you income and see if you have any money left over. You will start to see areas where you might be spending too much money and can cut back on. This can free up money for other purposes.
4. Now that you have everything listed out in front of you you can start assigning certain amounts of money to certain expenses. As you make those payment note them in your budget to see if you are staying on track.
5. As you find ways to cut expenses you can also start designating a certain amount of money that goes into savings or retirement accounts every month.
6. Your first budget may not work out quite right. It takes most people around three months to start getting their budget working. Be patient and keep working at it, before long it will become second nature and you will have control over your money.
7. Once you have a good grasp on your hand written budget look into getting personal budgeting software such as Quicken or Microsoft Money. This will make your budget much easier to work with and they offer additional feature that can help you plan your financial future.
These are the basic steps for creating a family budget that will get you started and on your way to taking back control of you financial life. If you stick with it before long you will start to realize how much money you used to waste and how much better it feels to know where your money is going and how it is working for you.
Andrew Bicknell researches and writes on a variety of subjects. To learn more about creating a family budget please visit his website Household Budgets at http://household-budget.home-choices-net.com/Family-Budget.html
A Royal Road to Frugal Living
Many excellent articles have been written offering useful, innovative tips on ways to save money. We’d like to take a different approach. Let’s look at what we call the “philosophy of frugal living.”
Don’t confuse “frugal” with “stingy”. What’s the difference? If you’re being frugal, you make use of the coupon in your Entertainment Book when dining out If you’re being stingy, you use the coupon as an excuse to under-tip the waiter. Being frugal is finding ways to save money where everyone benefits. Being stingy saves money at the expense of someone else.
Don’t make a budget and attempt to live on it! Instead, observe your spending habits over the course of a month and notice where your money goes and how the process feels to you. Are you spending a lot of money on something that you actually couldn’t care less about? Maybe you reflexively shop for a new outfit every Saturday. If you really love clothes, that might be exactly right for you. However, if what you really love is live theatre, your money would probably be better spent on show tickets and maybe even acting classes.
The point here is to pay attention to yourself and honor your own priorities rather than spending your money the way “everybody else” does. Some friends recently decided to spend a year traveling around the world. Needless to say, their travel expenses for that year were out of sight. However, they had no expenses for clothing (no job – hence no work wardrobe), Christmas presents or cards (an e-mail from Fiji to family and friends was as far as they went), or entertainment (finding themselves in a different country every few weeks proved to be plenty of entertainment).
Don’t buy what you can barter. As a young mother, I belonged to a baby-sitting coop. Members accrued “credits” by babysitting for other members. They could then spend their credits when they needed childcare. It was a terrific money-saving arrangement. More than that, though, it built a strong community with lasting ties between the families. Let yourself think creatively. If you love to decorate, cook, do photography, repair computers or do “handyman” jobs; you undoubtedly have neighbors who could use your services. See what they might like to offer you in return. You’ll be saving money and building friendships while doing what you enjoy.
Remember – generosity conquers fear. Often we focus on saving money because we’re afraid. We’re ruled by a model of scarcity rather than abundance. When you act with generosity, however, you master your fearfulness. Give a quarter to the homeless person, offer to help your neighbor move, bake that cake your husband loves that takes all day to make, smile at the grocery clerk (really, she’s going as fast as she can). Not only will you feel richer, you’ll find that it actually is true “cast your bread upon the waters and it will come back to you ten-fold.”
Peter Cole, ChFC, LCSW, holistic financial planning. AUTHOR True Self True Wealth. Peter Cole, representative of Securities America, registered Broker/Dealer member NASD/SIPC & Securities America Advisors, SEC registered investment advisor. FREE newsletter at http://www.trueselftruewealth.com
Your Home Business Budget Foundation
Why a Budget is Important. Let it be your guide from beginning to end.
Starting your own home business is a very tricky proposition. Starting your own enterprise is exciting, but it is also inherently full of risk. Enter discipline. Unless you get yourself going on the right foot, then the chances of achieving success are very small.
Conversely, as long as you have the right foundation, and keep working on that foundation, success is almost an automatic thing. It is vital that you run your home business on a strict budget, if you aspire for long term success. Strictly budget your time and your money.
As little as one hour a day, everyday, is enough to make your personal business get better everyday and grow steadily to keep your confidence up. Avoid distractions.
One of the most important parts of running your business is operating on a budget of money and time. Every ad and every supply and tool you buy must earn the value put into it. This is a golden rule that can make you successful as you are going to be at any business.
Many men and women, mostly unsuccessful ones, prefer going with the flow rather than with actually setting goals and budgets. For the most part, this attitude is a mistake. Unless you have an incredible memory and unnatural clear sightedness, planning for both the present and the future is a prerequisite to success.
No matter how you define that elusive concept. Remember, no sloppy ad, supply or equipment buys. Check everything out scrupulously before putting your hard earned funds into it. Always shop for better prices and quality with every purchase you make.
Because this article is about home businesses, we will begin by defining success as the growth and eventual profitability of your particular business. By growth we mean that the business will expand, hopefully outgrowing your home and eventually participating in the corporate arena or whichever one you feel comfortable to work in.
By profitability, we mean that the business will become a cash generating machine, so much so that you attain financial freedom, and never have to work a single day again for someone else, if you do not feel like it. You will be your own woman or man.
This article argues that in order to achieve growth and profitability, discipline is needed, and plans must be made and acted upon. I cannot harp on and emphasize this enough to you.
Crafting your budget
One of the most important plans you must conceptualize is that of your budget. Many businesses, even if they have great ideas and wonderful products, still fail for lack of proper planning and efficient allocation of resources. Do not let this happen to you. Only a home business on a strict budget can ever be truly successful.
First, make it a habit to write down, both what you earn and what you spend, on a daily, monthly, and yearly basis. A common stenographer notebook will be perfect for this. Make a different page for every expense. Every expense and every sale must be recorded so you know where you are everyday.This is the least that you can do.
Look over what you have written down and you will easily see the areas that can be improved upon, especially in the expense column. It is astonishing how many expenses we never notice until we get them down in paper. As the business grows larger, accounting knowledge might be needed. If you have neither the time nor the inclination to acquire the knowledge yourself, find someone who does.
Second, analyze the figures and determine the areas where you can control costs, and where you should add capital. Every business has areas that generate above average returns, as well as areas that under perform. As much as possible, redirect your resources to the projects and ideas that give you the most return. You will quickly start to learn this from experience.
Many years of experience have frequently given me the positive experience of having the lowest cost item or ad working for me best.
The great secret here is to, are you ready? Shop around for the best buy and do not let your emotions run wild on you when you read or hear presentations that have wild claims or will not give you the whole detail story until you pay them first. Hah! Never do it. Give me the details or forget about it. You do not need to take unnecessary risks.
Lastly, stick to your budget. Never forget this. A plan not acted upon is essentially useless, and a budget not followed is as useful as a page of doodles. Once you have written down and finalized your budget, do not make any departures from it unless absolutely necessary. Always have a solid reason for doing so.
Be disciplined. It is the only way you will get anywhere. By running your home business on a focused budget, you are securing your future at a small expense to the present and a nice profit in the future.
James M. Lowe writes original articles, press releases, e-books, blogs and websites about home business opportunities.
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