Even though money is one of the taboo topics to bring up, people often talk about it openly. Although it is never in a positively. Rarely do I hear someone say, “I’ve built up a very nice savings account over the past year”. When I talk to people about finances I tend to hear lots of negative comments such as, “I just can’t seem to make ends meet”. When the subject of budgeting comes up, all I hear are “What If’s”! “What if You don’t make enough money to…”, “What if you can’t budget because…”, “What if…, What if…”. For a while, I would let all the “what if’s” get to me. They all had valid arguments. But, after I stopped to think about it. I realized that they were their own blockade to the freedom they desired. You can ask “what if” until you are blue in the face, but that won’t change your situation. Nor will it help you to find a valid solution. What will change your situation is a plan. That is exactly what a budget is.
Definition : Budget – A written plan that tells you what to do with your resources.
In this instance your resources is your finances. Here are a few tips you should consider when creating your plan if action to reach your financial goals.
1. Pay First things first.
The first checks you write should not be the credit card or the cell phone company’s. Take care of your necessities first. Food, shelter, and transportation. Then with whatever is left, pay everyone else until you run out of money. If you have no money after you take care of the necessities, then that it. You have no more resources to spend. But, at least, make sure you have a food to eat, a place to live, and a way to get to work.. If you are out of money and there are still items that you need to pay, consider taking a look at my creating multiple streams of income post to find out things you can do to generate extra income.
2. Pay your obligations second
If there is money left after you pay your necessities, pay who you owe. This is where most people are hindered in their endeavors for financial security. They spend the majority of their time paying companies they borrow from, it seems they never get ahead. The trick here is not only pay the people you owe, also, stop borrowing money. This includes loans(except for mortgages), credit cards, overdrafts…etc. The less money you borrow the less money you have to pay back. The less money you have to pay back, the more you have for other things, like building a nest egg.. The sooner you start to understand this the better off you will be.
3. Don’t be so rigid, Leave room for change
Once you have your financial plan written, leave room for it to change. Let’s face it, change is the only thing in this world that is guaranteed. As long as you live, something is going to change. Since we know that life is going to happen, let’s plan for it. Leave room in the budget to catch the things that may come up. In the beginning this may not be so easy, but stick with it. It gets easier as you go.
4. Don’t overspend.
When the money is gone, stop! If your register (or whatever you use to track your spending) says you have zero dollars left, you can’t spend anymore. Don’t go get the credit card and start spending on it. As I stated in step 2, The less money you borrow the less money you have to pay back. The best solution to make sure you have enough money to go around, is to stop overspending.
5. Talk about money
The subject of money is such a taboo topic, in many households that generations have gone by and the knowledge of how to manage money properly has gotten lost. It is time to start the conversation about what money is and how to manage it. If you are married, communicate about your budget, even create it together. If you have kids include them too. If you are single, well… you’ve lucked out! You don’t have to answer to anyone but yourself.
Are these the fix all tips for budgeting; Not by a long shot. But, it is a good place to start. For all of those “what if” questions that may be going through your head… “What if you started telling our money what to do, instead of letting our money dictate the direction you are going”? “ What if you stopped overspending every month by using credit cards, and payday loans”? What If you had control over every dime that came into your household and you directed it to where you wanted it to go? If you asked these what if questions instead of negative ones, do you think you can build the life you want for yourself?
What if?
Corey Stokes 