The biggest secret to following a budget is: Write it and follow it. Sounds simple enough but the truth of it is if everyone did it then there would be many more rich or at least financially comfortable people in the world. Practice makes perfect and that includes sometimes tedious tasks that seem daunting.
Answer these questions for yourself:
Do you follow a budget?
Why or why not?
What comes to your mind when thinking about the word” Budget”?
The key to having a budget is to establish a savings to do things you want or need to do later. The following are examples of monthly saving goals for a person with an income of $1000 per month.
$100 towards charitable giving
$300 towards personal savings
100 towards retirement
100 towards investments
100 towards future goals: Home, College, Business Venture
$600 towards consumables
In traditional economics consumables account for 2/3 of income which is roughly 66.7% of income. If you can limit your expenditures to 60% then you are already managing your funds better than most.
* First find where you are spending your money. Find the value of all income and categorize where your money goes.
* Track expenses over the past three months and see what the majority of money is spent on unnecessary items that we forget about because we are not keeping track of expenditures.
Money saving tips
For one month drink homemade beverages only. (No prepackaged drinks.)
Inventory everything in your home. This will sound really stupid at first but if you do this you will have a working inventory in your head and on record.
* You can assess insurance value of home items in case of emergency
* You can get rid of junk you don’t need
* You can find money that you did not know you had
If you can find anything to resale in a garage sale or exchange do it. TODAY!
Also EBay, Amazon, and Craig’s list are popular sites for selling used goods. Use the money earned to start a saving account.
Assess your savings after selling your old stuff and don’t attach your personal feelings to anything that can’t return the favor. Once you have cleared the junk, fixed the leaks in your budget, and now you can handle real money issues.
Write a list or spread sheet with the following areas and follow the spending percentages exactly by the end of the year you will have more money saved than you ever thought possible.
Housing: (30% of your total income)
Automobile: Including-Gas Repair, Maintenance: (7% of your total income)
Insurance:(2% of your total income)
Food: (5% of your total income)
Personal Care: (12 % of your total income)
Activities:(1 % of your total income)
Miscellaneous: (2% of your total income)
Emergency : (1% of your total income)
Total: 60% of total income.
This is a simple formula that anyone can start at any phase of life. Money is not always the issue sometimes the biggest issue is the direction that money flows.
Helpful Websites
Reselling new/ used items:
http://www.ebay.com
http://www.amazon.com
http://atlanta.craigslist.org (used in many US cities)