Best Ways to Budget Your Money
Budgeting does not have to be complicated. Actually setting up a budget can be done using a simple Excel Spreadsheet . You should be particularly careful when selecting the budget categoriesbecause they affect how expenses are perceived and tracked.
The tricky part of budgeting is therefore not drawing up the physical worksheet, but finding ways to bring the budget from paper to real life.
The following is a list of the best ways to successfully budget your money.
Tie the Budget to Goals
When a savings category is tied to real life goals it become easier to put money into the account. Psychologically you know you are not saying goodbye to your money indefinitely, but chipping away at a goal that is important to you. When goals are established they need to be monetized and then broken down into milestones so they are more manageable. Goals also give a means to monitor performance because there will be a cut off date in mind and a minimum amount that needs to be allocated per month.
Make Sure it’s Automatic
When a budget is made automatic it removes the will power element from the equation. Automation also means that not having the time or forgetting to make payments or deposits will be a thing of the past. Bills can be set to be paid automatically from your salary via a deduction or standing orders can be set up to go to different accounts. You may not be able to automate every single expense but the majority of fixed expenses can be set up to be automatically paid which reduces the number of things to remember at the end of the month and avoid pesky late fees.
Use Cash Only
This can be difficult if you have become attached to credit cards, but if you usually carry a balance on your cards you will be doing yourself a huge favor. Breaking your dependence on credit cards will not only force you to live within your means but it will save you a bundle on interest payments.
Make Sure You Are Accountable
Budgets sometimes fail because there is no accountability. This means that no one knows if you don’t do what you set out to do and so you don’t feel pressured to make the effort. If you feel like you need the extra push to actually get things done speak to someone that you trust and get them in on your plan to save.
Putting intentions down on paper is a great start, but without actually implementing those plans the budget becomes nothing more than a pipe dream. If you are serious about making some financial headway, consider the tips discussed and find a way to work them into your life.
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