The key to building wealth starts with a budget. The problem with the word budget is that many people associate the word with people who are broke. I will be the first to tell you that there is a direct correlation between living paycheck to paycheck and not budgeting. If you don’t budget your money will leave you, it does not matter how much money you make… you need a budget. So how does this budget thing work?
Well, it starts by listing you living expenses and dollar amounts of each item. Once all bills are paid,the leftover money still needs to be told what to do.
Tip #1: Round up all expense totals to the nearest $25 increment, so if your cable bill is 156, you budget 175. This keeps those fluctuating costs under control and prevents overdrafts. Overdrafts are the 1st sign that you aren’t budgeting property and are living paycheck to paycheck.
Tip #2: The money left over after expenses are paid still has to be budgeted; this is not “pocket money”, “blow money”, or your “spend money”.
Tip #3: Be real with your plan, if you truly enjoy shopping for a new shirt twice a month then make that a budget item, same goes for hobbies. You are more likely to stick to a budget that gives you permission to spend on things you enjoy here and there.
Tip #4: Don’t make a budget prison, if you are too harsh in allocating your dollars you will say “Screw this budget, I deserve Cheesecake Factory!”
Tip #5: Automate savings and raises. You should budget after these items; it is wise to pay yourself 1st!
Tip: #6: Use a weekly spending fast once a month to stretch your funds.
Tip #7: Budget to purchase groceries, stop eating out it can be 10x more expensive
Tip #8: Revise, Revise, and Revisit
In my life, I am financially well-off and it is 100% the result of having a plan, budgeting, and being frugal. Budgeting is essential to change your money woes. Budgeting prevents drifting off course by identifying the path. If you are broke, chances are that your money has no plan. Is it a shock that the zero balance in your savings account is the result of not planning to put money there?