An old friend mine use to say, "money is like gas it expands
to fill the space". So you better figure out that space
During his life where he lost income, it always seemed to work and at times when income increased it always got spent.
Over the years because of a unique position I was in, I had the opportunity to look at a lot of people's finances and one thing I realized is that it doesn't seem to matter how much money you make. I would see the family making $20-30,000/yr doing just fine and then the family making $200-300,000/yr getting behind each month OR the reverse, with the family making $20-30,000/yr getting behind each month and then the family making $200-300,000/yr doing just fine, along with every income level in between.
So what matters is not how much you make, but how you manage the money you do have.
"If you fail to plan, you plan to fail". A budget is basically a plan for your money, so let's see how to plan.
To follow a budget, you need to first establish where you are. So a budget that has both an "actual" and "planned" section is what you re after. What you need to do is list what you're currently spending and then right next to it list what your budget goals are or the budget you want to follow.
Here's some tips to help:
When doing a budget always make sure every cent is allocated! Your income should equal your expenses. If not, the extra will disappear or "expand to fill its space". Your goal is to live under your means, so any extra should go to debt first and then savings. Otherwise the extra gets spent.
A "spending cash" item is essential. For example, say you only have an extra $5 every month, but you don't budget it and so when you're out you stop and buy something to eat and then your spouse does the same and now you're over the budget.
Sound familiar? If budgeted most people have a tendency to stay on track. There's been times in my life when the budget only allowed for a few dollars, so my wife would get half and I got the other half. She would go garage selling with her half, so she could get her shopping fix, and I would buy off the dollar menu.
Reality is that most will blow money anyways, so always set aside something no matter how small, the trick is to not be surprised at the end of the month and know what you're going to spend beforehand.
Budgeting for specific time periods is crucial, prepare a new budget each and every pay period, until you can become stable.
Don't forget "If you fail to plan, you plan to fail".
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