Why should you bother to live on a budget? You shouldn’t, unless you want to succeed with money…or retire with money in the bank…or get out of debt…or be able to deal with financial emergencies…or…well, you get the idea. Here are my top ten budgeting tips.
Barry’s Top 10 Budgeting Tips:
- Never forget that a budget is not about money – it is about BEHAVIOR and PRIORITIES.
- Your perception of what is important and what is not will drive your willingness to follow any budget – so seriously consider wants, needs and wishes (in other words, really consider what is important to you vs. what isn’t).
- Emergencies WILL happen, but not every unexpected expense or occurrence in life should be an emergency. Build an emergency fund and “emergencies” occur less and less.
- Credit cards are not an emergency fund and are a bad idea, in general. Do you want to make payments on a bad situation/experience?
- A budget must be flexible, simple, and must completely answer four questions:
- How much money do I have coming in (take-home or “net” income)?
- How much am I saving?
- What are my ongoing expenses?
- What are my debts and how am I repaying them?
- You should always do your budget before you get paid. “Spend” (spend/save) it ALL on paper before the money comes in, and then spend it in reality (according to your plan/budget) once it arrives.
- If you’re married, your budget will never work if you don’t agree with your spouse about it. Have as many fights about money as necessary to come to an agreement on your budget.
- Your budget is not a method by which you make someone else (or yourself) behave. It is how you make your money behave. You are in charge!
- Debt = Risk. There is NO EXCEPTION to that equation.
- Your budget will be different every month. For example, in the winter, you expect your heating bill to be higher; in the spring and fall it will be almost non-existent.
Do you need help building a budget that works? Set up a coaching session!