Friday, 18 August 2017

Budgetary Basics

Most people out there know how to make a budget, even if they can’t seem to stick to it. The trick is to make a budget anyways, and keep on doing it.

Repetition is the key to success. If you don’t know where to start, start with jotting down what you spent. 

Keeping track of what you are spending, and on what, is a good way to see where your cash is going.
A good way to do this, for the undisciplined, is to sit down at least once a week and login to your online banking app/website. 

Go over what you spent and on what (in the history/record of transactions). 

At first this can be a humbling/shocking experience as you see how much you spent on what and at what intervals! 

At least it was for me . . . this should serve as a wakeup call on the necessity of taking hold of your finances.

I highly recommend a spreadsheet (message me and I can send you one) to keep track of your bills and expenses. 

The problem with just winging it, is that you tend to spend all of your cash. Even if your bills get paid, there is little to nothing left over.

So, on that spreadsheet plunk in your fixed bills (phone, power, rent, etc) then estimate your other expenses (groceries, treats, entertainment, etc).

These other expenses are harder to budget for as they are not fixed and vary. 

For these I use a wallet for each one and put cash in there. It is easier to budget a fistful of twenties then $43.27. 

Also, you notice what you are spending when you have to start handing over cold hard cash. It is a psychological thing, trust me.

As you budget, remember, it is always best to slightly overestimate your expenses yet at the same time, underestimate (slightly) your income. 

This way, the combination of the two will help to land you somewhere on budget.

As you get started, I recommend altering this spreadsheet to reflect what you actually spent (regardless of how disastrously off budget you were). 

These spreadsheets from previous payperiods will help you to hone and refine both your spending habits and your budgeting skills.

It is a learning process and something that you need to practice at. 

Trust me when I say that having a budget (and sticking to it) will give you the tools needed to take hold of your finances and improve your life. (Fiscally, at least).

As always: Keep your head up, your attitude positive and keep moving forward!

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