Many people can’t even stand hearing the word: “budgeting”. It is often associated with being boring and forgoing all the things we want to do and experience with our money. It doesn’t have to be this way! Budgets don’t restrain your life; they give it true meaning and purpose. Ahead are 5 tips to utilize when creating a budget.
- Income/Expenses – Use an Excel spreadsheet or a budget app on your phone and write out your projected income and expenses for the upcoming month. Check out some great tutorials on YouTube to figure out how to do this. Write out your fixed expenses first and then estimate your remaining expenses. As time goes on, you’ll be able to fine tune these inputs and truly create an expert-level budget so you know exactly when your cash comes in and exactly where it ends up.
- Make Room – Be sure to include a category for unexpected expenses. Emergency car maintenance, home repairs, sudden medical treatment, etc., there is almost always something that will come up once a month you may not have been prepared for. Set aside $100-$500 per month in your budget until you have $1,500 available to be used in case of an emergency. Once your $1,500 fund is established, feel free to remove your unexpected expense category from your monthly budget.
- Dream – Are you looking to go on a tropical vacation to Aruba, buying a brand new car, or looking to finally get your college degree? Put it in the budget! Create a dream category within your budget each month. You can start slow with a little each month or make it a big expense each month. For example, $250 per month over 1 year = $3,000, more than enough to go and have a vacation with room to have fun while you’re there! To dream intentionally and enjoy a vacation with zero debt; that’s the power of the budget!
- Give – Giving isn’t always easy to do, but it pays dividends in the long run. Getting used to giving a portion of your income each month builds your generosity and spiritual muscles. You can give to your church, a charitable cause you’ve researched and believe in, or even a generous tip for a great dining experience, it doesn’t matter. What does matter is that you’re learning how to do one of three most important things you can do with money: Spend, invest, and give.
- Rearrange – Once you’ve established using and sticking your budget for 6 months, try experimenting with reallocating certain expense limits. For example: It’s the end of the month and you budgeted $400 for groceries. However, you only spent $300 on groceries. Take that remaining $100 and expense it elsewhere. Maybe you want to add it to your dream expense category. Perhaps tack that $100 onto your entertainment category and go enjoy a night out on the town with friends! Remember, that $100 has already been budgeted by you for the month so use it the way you want to.