Budgeting That You Will Stick With

Budgeting is just a matter of estimating your expenses and making sure that you have enough funds to cover them. Everything over and above that is just gravy. It's just bells and whistles that are designed to turn your boring old monthly bills into colorful graphs or up sell you other products. Which kind of defeats the purpose of keeping a budget which is to control your spending so that you have money leftover that you can save.

The most important step in creating a budget takes place in the planning phase. There is always a reason that you were prompted to create a budget in the first place. While the process of categorizing your revenue and expenses is fairly easy, it is rare that they will equal each other. When expenses are greater than your revenue, it is said that you are in the red. We will address this situation in later hubs. However, when revenue is greater than expenses, you are in the black and can apportion it to that most important category that is the reason for this exercise.

Any plan that puts a limit on spending can be considered budgeting. From just keeping in mind the importance of saving and thereby keeping spending under control to accounting for every penny with all kinds of worksheets and graphs. There are so many different plans because there are so many different personalities. Be sure to find one that fits your personality so you can stick to it.

If you have lost your job and have no money coming in, then you have nothing to budget (the only good thing about loosing your job - if you can think of it that way). Replacing a salary can be almost impossible in this kind of economy (but may be a reason to start your own business!). If you must live off your credit cards for a couple of months, you can make a plan to pay it back so you don't stay in debt. Get a short term or seasonal job so the deficit is not complete.

I think the reason a budgeting fails a lot of people is that it is too restrictive. After working hard all day, it feels horrible not to feel free to splurge a bit on yourself. Build some wiggle room into your budget, so that you don't feel like you have failed if you spend a bit too much. If you splurge every night or blow your budget regularly, you may have a problem. You need to find middle ground where you can stick to your budget so that you will save some and at the same time give yourself some freedom to spend.

Please allow me to share my system with you. Remember that this is what works for me and may not be good for you. I get paid twice a month at my job. I write the amount of my check on the 1st at the top of my budgeting sheet and again in the middle. Underneath my revenue, I write a list of my expenses or the bills that I have to pay and when they are due each month. I include 10-30% of my salary as savings as one of the expenses. Finally, I leave a couple hundred dollars for groceries and extras like hair appointments or purchases on eBay. This leaves me the flexibility to splurge a bit without crashing my entire budget.