How to Budget for Success with One Simple Principle
Why does it seem that people quit budgeting before they even start? For one simple reason -- much like dieting -- they don't see the results they expect from the work they're required to put forth. Because they don't know how to budget, they don't see the results as quick as they'd like.
To be honest, most people go about budgeting in such a way that they're doomed to failure from the start. One guru will tell you how to budget using some contrived percentages based on their own experience. Another guru will tell you that the only way to know how to budget is to go back to the Stone Age of cash and envelopes (it works, it's just extremely tedious, which sets you up for failure). The question remains: How to budget effectively so you don't fail.
The key is to budget only what you have on hand. Don't project. Don't estimate! Simply look at your spending accounts (whether you have one checking account or several) and budget each of those dollars to a spending or savings category. You give every single dollar a job.
Now, when you're paid again, take that money and give ALL of those dollars assignments as well.
The secret with budgeting is not to become some type of visionary that can forecast all expenses with the greatest of ease...you simply want to raise your awareness levels so you know what your money is doing. This key to awareness is to insure that NO dollars slip through the cracks. Each must be given a job to do: entertainment, food, emergency fund, retirement savings... As you begin making sure each dollar is working for YOU you'll realize that your dollars will go further and your spending will start to match up with your value system.
So back to that question of how to budget? Don't be an estimator. Simply give every dollar that you have a purpose. Make them all a part of your plan and your bound to see success.
To be honest, most people go about budgeting in such a way that they're doomed to failure from the start. One guru will tell you how to budget using some contrived percentages based on their own experience. Another guru will tell you that the only way to know how to budget is to go back to the Stone Age of cash and envelopes (it works, it's just extremely tedious, which sets you up for failure). The question remains: How to budget effectively so you don't fail.
The key is to budget only what you have on hand. Don't project. Don't estimate! Simply look at your spending accounts (whether you have one checking account or several) and budget each of those dollars to a spending or savings category. You give every single dollar a job.
Now, when you're paid again, take that money and give ALL of those dollars assignments as well.
The secret with budgeting is not to become some type of visionary that can forecast all expenses with the greatest of ease...you simply want to raise your awareness levels so you know what your money is doing. This key to awareness is to insure that NO dollars slip through the cracks. Each must be given a job to do: entertainment, food, emergency fund, retirement savings... As you begin making sure each dollar is working for YOU you'll realize that your dollars will go further and your spending will start to match up with your value system.
So back to that question of how to budget? Don't be an estimator. Simply give every dollar that you have a purpose. Make them all a part of your plan and your bound to see success.
About the Author:
Jesse Mecham will show you how to budget with his free 10-day course. Jesse has helped thousands find harmony with their money through four simple money management rules.
posted by Credit Counseling at
3:08 AM
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