Managing your money is easier said than done. But the best part is, you don’t have to be a rocket scientist. Only simple skills are required: basic math of addition and subtraction. Everybody has it. The only thing missing is that you are not doing it.
Perhaps you are brought to this article because you want to know how to handle your hard-earned “dough”. You haven’t managed your money properly until you have started making your financial plans. The next thing you need to learn is how to create an effective budget that is tailored to your unique self.
Create an Effective Budget. How do you create one? There are so many advisers around telling you how to prepare it. The bottom line is the fact that it needs to be up and running and created specifically for you, otherwise it is just a waste of your time. You need to create a budget that is simple and effective. A useful budget that is aligned to your needs.
Save. As the saying goes, always save for the rainy days. Even the ants stock up their food during the summer. You should start to save money too. But the sad truth to most of us, almost nothing is left after paying those pesky bills. Your budget is your most helpful tool, it gives you an idea much you will be spending in the future and that in return provides you a sneak peek if there will be extra money left in your pocket.
Did I mention that your budget has to be written? When you design your own, write down all your income and subtract your bills or expenses. Please remember that one of the important factors of creating a budget is that it allows you to identify your expenses ahead of time. The difference between your earnings and budgeted spending is the overage or shortage amount. Recording your checks is not budgeting. It is an example of your actual financial event that has transpired. A budget is your monetary plans before it hits your checkbook.
Your budgeting goal needs to realistic. Recognize only the income that you will actually earn. Making one may sound complicated to others but it is simple once you get used doing it. As a reminder from the author, “Budgeting is always a battle you wage against your own self. Therefore, always plan and be prepared.”