For many people, the thought of budgeting brings up images of canceling cable, the gym, and brown bagging lunch. We hate deprivation and being told we can’t have something. This is why we hate the term budgeting. Creating a plan for wealth sounds much better.
Budgeting is really just a plan for how your money is going to be used. If something is worth doing, it is worth planning and writing down. This is really all budgeting is. It’s writing down a plan of how your money is going to be allocated. On the upside, we get to spend money.
There are many free and paid budget programs and just as many resources online that will help you plan and save. Sites like https://bwccu.org/ offer free resources and information for getting more out of your money. They come highly recommended.
Making Financial Progress
Having a written plan can help us work towards financial goals. Whether we are trying to pay off debt, build up that emergency fund, or get that down payment for a house, a wealth plan will pave the way. People often have a lot of guilt around money. These feelings can sabotage our financial futures, so having money allocated for something means we can spend that money guilt-free.
It also makes saving easier. Pay yourself first may not work if you don’t have enough left over for groceries or your car payment. Being able to see exactly what you need and what you have can really help put your finances in perspective. Once you can see where your money is going and think about where you would like it to go, cutting things that really are unnecessary becomes easier. There is even an app for canceling forgotten subscriptions and recurring payments.
Getting Down to Zero
A zero-based budget is a budgeting technique where every dollar is accounted for. After all expenses and payments, the balance you started with becomes zero. This is really the heart of budgeting or wealth planning. You have a certain amount of money and a certain amount of expenses and a certain amount left over to be saved. Most people who have actually taken the time to budget or plan notice that they spend less and meet financial goals sooner.
Priorities and Saving
Basic needs are a must. Food, shelter, transportation, clothing, etc. Once the basic needs are met, money can then be allocated to other areas. Couples and families should work together and join forces to make the budget a success. Saving money and making smart goals like debt reduction or fun goals like a vacation can bring people together and make the saving and planning more like a game.
It can even be a fun challenge to see if some budget items can be tightened up and the money moved to a better category. Paying off debt, cutting unused services, getting lower rates on insurance or credit cards can all create extra money. Sometimes food costs can be cut just by taking the time to plan better. Cooking at home and planning shopping trips can result in saving money, time, and eating better.