I was speaking with my mother-in-law the other day and she mentioned that she doesn't budget because she knows she'll be in the red. She was basically implying that it wouldn't do any good.
A mindset like this terribly prevalent. I suppose that's a valid concern. Why would you budget when there isn't enough money? Read further to find out exactly why.
Despite the fact that the bills are sky-high and your available funds are low -- when you'll take the time to consciously look at those available funds and make the decision BEFOREHAND about what your money should be doing. Do NOT throw in the towel on this! Take a hard look at your money and give it focus: clothes, food, electricity, miscellaneous, etc. This exercise is vitally important.
Now it may very well be that you end up with more obligations than money, and the money simply runs out. That does not mean the exercise didn't produce positive results. Simply going through the process made you prioritize, so you know that your money is doing the most you could have it be doing at that time. That will be key in learning how to budget.
Your second task is to write down every time you spend any money whatsoever. Know that even if you're spending well into the red zone, writing down what you spend will cut your losses wherever ossible. The total damage done to your bottom line will be significantly reduced if you can manage to simply write down what you spend.
The exercise of manual recording increases awareness and strengthens the psychological connection between you and your money. These days, every other interest out there wants you to spend your money without considering your own circumstances. This is hardly a way to budget! Record your spending and you'll become painfuly conscious of where you can shave spending.
In conclusion, looking ahead, and recording your expenses as they come helps you budget as well as circumstances allow. The damage won't be nearly as bad, and you'll be able to record that much quicker once you can turn things around with a long-term plan.
A mindset like this terribly prevalent. I suppose that's a valid concern. Why would you budget when there isn't enough money? Read further to find out exactly why.
Despite the fact that the bills are sky-high and your available funds are low -- when you'll take the time to consciously look at those available funds and make the decision BEFOREHAND about what your money should be doing. Do NOT throw in the towel on this! Take a hard look at your money and give it focus: clothes, food, electricity, miscellaneous, etc. This exercise is vitally important.
Now it may very well be that you end up with more obligations than money, and the money simply runs out. That does not mean the exercise didn't produce positive results. Simply going through the process made you prioritize, so you know that your money is doing the most you could have it be doing at that time. That will be key in learning how to budget.
Your second task is to write down every time you spend any money whatsoever. Know that even if you're spending well into the red zone, writing down what you spend will cut your losses wherever ossible. The total damage done to your bottom line will be significantly reduced if you can manage to simply write down what you spend.
The exercise of manual recording increases awareness and strengthens the psychological connection between you and your money. These days, every other interest out there wants you to spend your money without considering your own circumstances. This is hardly a way to budget! Record your spending and you'll become painfuly conscious of where you can shave spending.
In conclusion, looking ahead, and recording your expenses as they come helps you budget as well as circumstances allow. The damage won't be nearly as bad, and you'll be able to record that much quicker once you can turn things around with a long-term plan.
About the Author:
Jesse Mecham can show you how to budget with four simple rules of cash flow. His free course spells out personal budgeting for the layman so you'll be able to stick your budget for the long haul.
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