BUDGETING YOUR WAY!

When you think about the word budget what comes to mind? For some people it means controlled spending, for others it’s giving up the fun and for some it’s preparing for tomorrow. Many people see the word budget as a negative thing, but I see the word budget as a positive. To me, the word budget means planning for new adventures and achieving dreams.

Budgeting is spending in confidence not guilt

A budget is about sorting through your finances and creating a spending plan that allows you to be confident. It’s not meant to hold you back from going shopping or keep you from having fun, it’s simply to guide you in a better direction.

When I went to college, I opened up one checking account and two savings accounts. Every time I earned a paycheck, received birthday money or even holiday money, I’d divide the money between all three accounts. The checking account was my “fun” money. My fun money allowed me to go to dinner with friends, shop the mall with the girls or take a fun trip.   Then I had one savings account that was really for saving, this is the account that I am building for the future. The second savings account was for Graduate School expenses. I always dreamed of getting my masters and I was diligent about putting money away so I could cover the expenses without having to depend on my parents or having to take out student loans.

Having these three accounts helped me organize my expenses in a way that allowed me to never miss out on a fun memory with friends, plus it created a nice start for my long-term savings and it allowed me to pay my Graduate School expenses each semester so I was able to complete my studies without debt.A budget is simply of way of making your goals and dreams come true.

Create a budget that works for you… not your friend.

Not all budgets are created equal. Everyone has different financial goals, spending habits and incomes. Don’t follow a budget that is going to stress you out but instead put the time and energy into creating a budget that will work with your needs. Here’s my suggestion.  First, collect all your receipts from one month of spending.  ALL your receipts, no cheating.  Even small purchases can add up throughout the month.  Then add up the receipts to see how much money you are spending. Then, create a list of priorities, rank your priorities and created a budget based on that. Set small goals that are achievable and don’t leave you discouraged.

Maybe you found that you like to eat out to dinner a lot and you were spending roughly $100 on meals. Try setting a budget and goal of $75 for the following month and adjust that number as needed. Set goals that work with you and use that as a guideline for creating your budget.

Be Honest with yourself!

It’s important to know and to understand how much money you have coming in… after taxes. When you look at your paycheck or any other source of income, look at the bottom number, and base your budget off that number. And always, look at your budget… not the balance in your account. Sometimes we might think, I set a budget for $100 for food, my account is showing $120. Great!  I have can have another dinner with friends. When you find left over money, be honest with yourself and add it to your “future” account or place that money somewhere you won’t touch it because you never know when you might need it.

Prepare for the unexpected!

Emergency expenses are something I never thought about… until I ran into an emergency. We never know when a job loss, medical emergency, home damage or car trouble is going to happen. You don’t want sit around waiting for disaster to strike, but you want to be prepared for all situations. It’s important to have an emergency fund set up and it’s important to keep it separate from your other accounts. This way you are less likely to turn to that money to spend. Always be prepared!

So, get to creating a budget that works for you. One that allows you to chase your dreams and have new adventures in your life!

^Alysha