|Faith and Finances|
5 Keys To Getting Your Budget Under Control
Know What's Coming In
Believe it or not, a lot of people can't tell you how much they make, let alone what their bring-home pay is. Obviously, a budget needs to be based on what you bring home, not on your gross salary. How you are paid also affects your income. Are you paid weekly? Every two weeks? Twice a month? Once a month? If you're a teacher you may only get paid 9 months out of the year and then have 3 months with no income. All of these scenarios will affect how you budget and whether or not the budget you create will work.
Really, I don't even like the word "budget." I prefer "spending plan." Most people think of a budget as something that tells them the maximum them can spend in any given category. Whatever is left over they can do what they want with. The problem with budgeting like that is you will tend to blow through a lot of money that you'd be better off allocating for a specific purpose.
So, first figure out how much you have coming in. Then you're ready to move on to the second key.
Know Where Your Money is Going
Most people are surprised when they determine where their money is going at just how much of it goes to impulse spending - and I'm not just talking about those items that are strategically on display at the check stand. What about when you're surfing the net, doing research on eBay, or Craigslist, Amazon, or one of the other major internet retailers; are you able to just say no, or do you add items to your shopping cart impulsively... after all, it's only $25. There was a time when I would make one "small" purchase after another on the internet, only to discover I had somehow managed to spend $200!
When you determine where your money is going you need to then separate that into categories. What expenditures are necessities and which ones are extras? This is the first category you will want to rein in. Don't eliminate it; just make sure you set aside a realistic amount for some non-essential purchases. Otherwise, you will feel deprived and blow your financial diet completely.
Basically, you are going to start with giving, followed by savings, followed by necessities and then your non-essential purchases. If you have more left over at the end, you can either apply that amount to debt elimination, savings or giving.
Know Where You Want to Go
You have to have a plan. Spending is largely emotional. We overspend when we're feeling depressed or sorry for ourselves. We overspend when we are happy about a tax refund and feel we deserve a treat. We increase our living expenses when we get a raise to equal the amount of the extra income - after all, we deserve that too!
What I'm suggesting is that you have an end goal in mind that is so emotionally driven that it will be painful for you to spend money outside of your spending plan.
If you truly want to retire and enjoy at least the same standard of living you have now, then it will be important for you to save money for your retirement. I can guarantee you that Social Security will not maintain your current lifestyle for you. No matter what their annual report says about how much you will get every month when you retire.
If you really want to go on that vacation to Europe, you will find it easy to do without your daily latte in the morning and energy drink in the afternoon. We don't have any trouble making sacrifices if we feel that the end result is worth it.
That's where most people fail when creating a budget. They have a vague feeling that they should budget, because someone told them it was a good idea. But, they don't own the idea. They haven't given it substance. It isn't real to them. So, the first time something comes along with an emotional impact, they whip out their wallet and write a check or, worse yet, put it on a credit card going into debt for something they don't need and probably won't even want anymore by the time it's paid for.
Develop a Little Flexibility
It will probably take you a few months before you really have a workable budget. It's easy to underestimate how much you will need for groceries. It's also easy to forget that the electricity bill may vary by a hundred dollars when the weather is very cold or very hot. It's easy to forget about those payments that aren't monthly, but still have to be paid quarterly, every six months, or annually. Then of course, there are unexpected emergencies, like your car breaking down on your way to work.
Leaving these things out of your budget can really mess you up. If you don't maintain an attitude of flexibility, you may be tempted to just quit. Just remember to remain flexible, change your budget here and there, and tweak it until you get it just right.
Have an Accountability Partner
It's definitely easier to stay on track if you have an accountability partner. If you're married, then your spouse should be your accountability partner. You'll want to sit down weekly in the beginning to see where you are and whether or not your spending plan is working. If you are single, see if one of your friends would like to team up with you and you can keep each other on track. Another option is to find a class or group focused on getting out of debt or budgeting (or both!).
A great one to look into is Dave Ramsey's Financial Peace University. You will be encouraged to partner up with another attendee as an accountability partner, but you will also have the entire group to bounce ideas off of, get encouragement from, and lend encouragement to.
My name is Cheree Miller and, believe me, I've been where you are. I've made some poor choices in my life. I've been broke, with creditors calling, writing, and sending court summons. I've had my bank account garnished and wondered how I was going to feed my family. But, I can tell you that you can learn to make good choices where your money is concerned. You can get out of debt if you remain focused on the end goal instead of wallowing around in a pity pool feeling sorry for yourself. Life was meant to be enjoyed.
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Cheree Miller is a Christian, single parent who left the fast-paced California lifestyle behind 6 years ago, and now lives on 15 beautiful acres in the Arkansas countryside. By day, she works as a practice manager for a veterinary specialty surgeon, using her management skills and internet experience to promote his business through traditional methods as well as over the internet utilizing a variety of social networking platforms. She is a prolific writer, contributing to on-line article directories as well as maintaining several blogs and websites of her own on a variety of subjects. Cheree is an active member of her church where she can often be found volunteering her services as a greeter, or running the projector, or singing on the Praise & Worship Team. For more informationclick here!