You hear so many people say, “I need to get on a budget!” However, it’s not just enough to create a budget; you have to also stick to that budget. It can be difficult to change the way you spend money, but it doesn’t always have to be. And once you get that budget done, it is easier to see where your money goes, so it might not be as hard to stick to it as you might think.
Some people just think it’s entirely too hard to sit down and go through all of the number crunching that is needed to get that budget set up. But, I’ve made it extremely easy for you by creating this budget sheet you can download here and all you’ll have to do is fill in a few numbers. The benefits you will receive from creating your budget will certainly pay off more than you might ever realize.
A lot of people start keeping a budget but if they veer off the path they’re on they think all is lost and they give up. All is not lost – it’s like going on a diet. Just because you ate that one piece of pizza doesn’t mean you’ve blown your entire diet. It just means you’ve eaten one thing you shouldn’t have and you pick up where you left off. It’s not the end of the world and you more than likely didn’t blow your entire budget!
Why Create a Budget?
Common sense tells you that creating a budget is a good idea but you might still need a little motivation. At the beginning it isn’t fun because you do have to really look at your income and see what goes out (download your FREE budget sheet here), but in the end, when you see the rewards of your efforts you will really enjoy it. If you’re like me once you’ve created your budget and see all of the good stuff that comes from it, you’ll never live without a budget again!
If you are living paycheck to paycheck nothing can be worse than checking your mailbox and seeing nothing but bills. But, if you have a plan to deal with those bills you can eventually start to save some money and not have to wonder if you’ll be able to pay what you need to pay for the month.
A budget will give you peace of mind because you’ll know what you have to pay, when you have to pay it and you’ll have the money to pay it because you’ve budgeted it all in from the beginning. You can take a breath and feel better about your financial life.
You will now be able to make smart decisions about your money and where you are spending it. You’ll know what you need to save for in order to make sure that all of your expenses are covered every single month. That’s worth a ton! You will begin to understand too what you actually NEED and what you simply want.
Common Pitfalls When Budgeting
You might have tried a budget before but didn’t feel you were successful. It might be because you weren’t sure exactly how to do a budget that applies to you and your family. Some of things that might have gotten in your way could include:
- Not making a realistic budget
- Not committing to your budget
- Not communicating with your spouse/partner about budgeting issues
- Not understanding needs and wants
All of these can be common mistakes that people make when they set out to budget their money because in order to have a family budget the entire family has to be on the same page. If you save and your spouse spends then you aren’t going to get anywhere.
Know Where You Stand
It’s vital that you are honest with yourself and your family when you start to create your budget. If you don’t write something down it doesn’t mean it doesn’t exist and it will come back to bite you in the rear end later. Trust me on that! I’ve been there and done that!
Take these steps to know where you stand and download your FREE budget worksheet here to help make things easier for yourself and your family.
Step 1: Track Your Spending
Keep up with what you are spending each month on everything you’ve written down. This includes every single penny that you spend. Yeah, it can be time consuming and maybe even irritating, but in order to know where you money is going you HAVE to track it.
Step 2: Close Examination
Look at what you’ve spent and what you’ve spent your money on now that you know where it’s going. Do this with your spouse/partner because you both need to know where you can cut back and what you need to do to cut back. It’s going to take a while to go through it all, but it will help the process along more than you know.
Step 3: Trim Your Expenses or Increase Your Income
Once you’ve looked through your budget see where you can cut some expenses out. Your income HAS to be more than what is going out. If it’s not, you might want to get a part-time job to pay off some debts. Or you could try to get a job that pays more. If your expenses are continually more than what your income is, you will never get ahead. Do what you have to do – trim what you have to trim or figure out a way to increase your income.
Think you can’t do it – I’ll bet you can. I once had 1 full-time job, 2 part-time jobs and went to college at the same time. And yes, I was a single mom to 2 kids at the time so my life was full, but I knew I had to make more money and I had to do what I did to make enough to keep them fed and a roof over their head.
Step 4: Plan to Pay Down Your Debt
If you don’t have any debt then good for you! But if you are then you should put into your budget a way to pay down that debt. No matter what kind of debt it is, you need to get rid of it! I cannot say that enough times – get rid of ALL of your debt!
If you have credit card debt, get them all out and look at them. See which one you owe the least amount of money on and start with that one. Pay extra on it every single month until it’s paid off. Continue to pay the minimum payment on the other cards you might have, and for the love of all that’s good, stop using them!
Once you pay off the smallest use the money you’ve been paying on that one to pay off the next lowest payment. Throw the other card away and stop using it immediately. Don’t rack up another balance on it. It’s not worth it and you’ll regret it later on down the road.
Do this until all of your cards are paid off. It is going to be hard and will take some time, but being debt free is the best feeling in the world and I want you to feel that every single day! Once you see those balances start to go away it should give you motivation to keep that going!
Step 5: Keep Tracking Your Spending
Just because you’ve gotten yourself out of some debt and you are no longer living paycheck to paycheck it’s still important to continue to track what you are spending. You don’t want to end up where you were previously. You never want to be there again. Continue to keep up with the amount of money you spend and where you spend it and you can break the cycle you were part of before.
Step 6: Plan for the Future
Once you begin to see the light at the end of the tunnel it will be easier to plan for the future. You’ll be able to save money and you’ll be able to put money into a 401K or whatever you choose to use for your retirement.
Start to increase what you set aside for savings and put money into separate savings for you children’s college education. Have a plan for what you want to do in the future and save the money to fund it.
Now that you have some tools to work with for getting you started on your way to a great financial future you’ll want to think about your kids too. They need to know how important money can be for them and including them in your budgeting can teach them a great deal about money management. You can read more about that here.
If you still feel like you need some guidance when it comes to creating your budget (savings plan as I like to refer to it), take a look at this guide that can help you a lot! It’s Creating a Savings Plan and is full of useful information and advice and includes great ideas to help change your mind set about money!
Please leave a comment and let me know if you’ve set up your budget, how you did it and how it’s going for you! I want to hear your success story!