What is it about the word “budget” that scares off so many people? Budgeting your money is one of the smartest, most beneficial things you can do to help yourself and your family, especially during tight financial times. If you are in dire financial straights, and stressed out, that is exactly the time when you need to know where every penny is going, especially were credit cards are involved.
Oftentimes, when you ask a person who is in debt, “where did your money go?”, they haven’t the slightest idea. All they know is that they are having a hard time, are behind on bills, and wonder how to dig out of this money pit. There is a simple answer: budgeting your money!
A budget is a written map of where your money needs to go, when it needs to go, and how much money you have available to pay. There are software programs you can use to help with financial planning. They are a great way to begin your budget. Some even will allow you to schedule automatic online payments.
There are tools you can use to stay on a budget. First and highly recommended, is a savings account. A savings account not only provides a buffer from unexpected expenses, it is a good service to help you plan for and pay for vacation holidays, a new TV set, and other items, without bills to pay out. You gain interest, and by making savings a regular habit, the amount grows painlessly. A good plan is to pay yourself first, right into your savings account.
Calculate a Budget Plan
You can do your own plan for budgeting your money right now! Just get a pen and piece of paper, and your bills together. Write down on each line, every bill, the due date and minimum payment, and the total due. Then total the columns. Now you know exactly how much you need per month and in total for all your debts. Include rent, food, gasoline, and medical expenses as well as credit cards and loans. Then do the same type of listing for all income monthly.
If your debt load is higher than your income, you have a debt problem and need to reduce payments, or refinance to where you are able to make all payments monthly. Once you develop your monthly budget of income and expenses, you will begin to feel better psychologically and become more confident that you can manage your own finances.