Budget Footnotes

Just a few notes about budgeting after Xmas spend holiday and back to school costs.
Personal finance is the science of handling your own money. It involves all financial decisions and activities of an individual or household – the practices of earning, saving, investing and spending. Matters of personal finance include the purchasing of financial products, like credit cards, life and home insurance, mortgages and of course various investments and investment vehicles. Banking is also considered a part of personal finance, including checking and savings accounts, and online payment services. All individual activities fall under the purview of personal finance; personal financial planning generally involves analysing your current financial position, predicting short-term and long-term needs and executing a plan to fulfil those needs within individual financial constraints. It depends on ones expenses, income, living requirements and individual goals and desires.
A Budget
The point of the budget it to keep you out of overwhelming debt and help you build a financial future that will give you more freedom, not less. So think about how you want your future to be and remember that keeping to your budget will help you get there. Adding to you debt load, on the other hand, will mean that your future could be tighter.
Remove the options that allow you to cheat on your budget.
Availability is your enemy. Make it more difficult on yourself to make impulse purchases, in other words, set up barriers so you have time to stop and think: “is this purchase necessary?” Take yourself off retailer email lists; clear our your stored payment information on your favourite online shops so you can’t just click to order.
Reward Yourself
If you are constantly looking at what you have to cut and give up, the very act of budgeting will become distasteful. A mixture of long and short-term gifts to yourself will help keep you motivated. When you’ve been faithful to your budget for a month, give yourself a reward. Even small ones can help (a night out with friends, a concert, a little extra cash for spending or something totally different). Start building associations in your brain – that sticking ti your budget has a pleasurable result.
Educate Yourself
Instead of taking the more common road of instant gratification, which leads so easily to overspending and endless dect, learn all you can about finances, money management, and how you can best invest in yourself. Talk to your financially savvy friends; get real – world tips and advice from people who are doing well with their money. The more you learn about handling money wisely and the rewards for doing so, the more concrete the reasons for budgeting will be.
Eliminate Unnecessary Expenses
Once you’ve gotten a sense of where the money goes, it’s time to tighten up. All cutbacks should start with items you wouldn’t miss or habits you should change anyway – like reducing your fresh food purchase if you find ingredients spoiling before you can eat them. Or eating at home more instead of at restaurants. Some expenses you shouldn’t drop, but might be able to adjust – say, reducing your auto insurance by switching carriers or cancelling household insurance.
Keep a Budget Journal
Once you’ve gone through these steps, monitor your progress for a few months. You can do this by writing everything you spend in a notebook or budgeting apps on your phone. How you track your money isn’t as important as how much you are tracking. Focus on ensuring that every cent is accounted for by dividing your expenses into categories. Fine-tune and adjust spending as needed after each month.
Seek New Income
For the time being, saving and investing money is out. But consider ways to increase earnings: working overtime, getting a second job, or picking up some freelance work.
The Bottom Line
To manage your monthly expenses, prepare for life’s unpredictable events and be able to afford big-ticket items without going into debt, budgeting is important.
Keeping track of how much you earn and spend doesn’t have to be drudgery, doesn’t require you to be good at math, and doesn’t mean you can’t buy the things you want. It just means that you’ll know where your money goes, you’ll have greater control over your finances and you’ll probably be able to sleep more soundly at night.
A budget isn’t a prison cell to keep you away from your money. Rather, it’s a tool you use to make sure your future is better – and yes, richer – than you are now.
Helensville/Waimauku Family Budget Service Inc
49 Commercial Road, Helensville
09 420 7740

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