Even for the rich and famous, budgets aren’t entirely out of the question. You need to make sure that they money you are taking in is larger than the money you spend, because you can quickly find yourself in debt if you are not careful. This has happened to millions of Americans, but those who are smart balance their budgets and stay on point with spending. Some weeks you might spend more, or you might have an unforeseen circumstance arise that will end up costing you money, but that should all be allocated into your savings. Do yourself a favor, and open up a new excel spreadsheet and list your take home income, and then subtract whatever your expenses are. Using this manner, you can track how much money you will have as your progress through the coming months. It will make it easier to save money, since you will be more aware of exactly how much you are spending.
Pick the right budget plan
Even if you earn a good salary and don’t usually run into financial straits, it’s always good to have a budget established so that you can track your spending and figure out what exactly you can afford. When you aimlessly spend money on credit/debit cards, and spend cash as you have it, it’s difficult to keep track of your outlay. You typically spend more money without realizing it. The recommended way of creating a budget would be to make an excel spreadsheet. Add formulas to the sheet that automatically calculate and balance your budget for you, so that all you need to do is enter your income and expenditures. Excel spreadsheets are great because not only can you automatically calculate your entire expense report with a limited amount of variables, but you can also keep a good historical record of what your expenditures are and how you’d like to fix them. Once you have this information written down seeing how much money you are spending make things more transparent.
Know your finances
If you have car payments, mortgage, insurance, etc., then creating a balanced budget could keep you out of debt. Certain expenses can really start to add up, and unforeseen circumstances can sink your budget rapidly. If you have bad credit, things are worse for you, because you will be paying a large amount of money each month in interest. However, if this is a problem for you, then creating a budget is an excellent idea, because it will help you pull yourself out of debt. Being in debt is never a good time, but if you have clear visibility into your finances it will be easier to save money. If you don’t believe it, or are still skeptical as to how much it will help, try it for yourself. Get onto Microsoft excel and start charting your income/expenses. You can leave yourself money at the end of each week for entertainment so you can have a little fun, but if you are limiting your spending you’ll start being able to save money for other things. It’s always nice to have a safety cushion of money that you can use for whatever you’d like.
Creating a budget is important, but it’s significantly more important to manage your finances. Even people with a lot of money need one, because spending can get out of hand no matter what your income may be. But it’s up to you to pull back on the reigns and create a budget that will allow you to live within your means and still have a rewarding life. These are just a few simple tips—in the end it comes down to you. But if you need to pull yourself out of debt or manage your reckless spending habits, then you should consider using this method. It’s worked for a lot of people.