A budget or spending plan is one of the most powerful tools to help you achieve control of your finances. Considering that the average American spends about 110% of their monthly each month, most people aren’t using a spending plan. And this is one of the main reasons the average credit card debt per household is rapidly approaching $10,000. Consumers without a spending plan often experience lack of financial control, high credit card balances, and high levels of stress.
Follow our budgeting steps below to develop your spending plan:
-
Get motivated. The word “budget” and “motivated” very seldom so together. Usually when we hear the word budget, we cringe. Negative emotions and thoughts arise. We usually associate budget with words like “sacrificing”, “restrictions”, or “penny-pinching”. But instead of having the glass is half empty approach, look at budgeting in a positive way. After all, strong budgeting skills will only lead to:
-
Having more money for YOU
-
Less financial stress
-
More control of your finances
-
Achieving you financial goals
-
Now that you are motivated, you need to put together a Rough Snapshot of Your Monthly Expenses and Income. List all of your expenses and income on our Budget Form. Make sure every expense is account for including the small stuff (snacks, sodas, haircuts, pet care, alcohol, tobacco, etc.). If you are unsure on some categories, input your best guess. Most people frequently come up short on the food and groceries category. Take your average daily food expense and multiply it by 30 (i.e. $15 per day times 30 = $450 per month). Take any annual expense (taxes, memberships, etc.) and divide it by 12. Keep this form stored safely as you will come back to it after step 3.
-
Now, it’s time to Track Your Daily Expenses on our Monthly Expenses Worksheet. This will give you the actual total of monthly expenses. Be sure to start on the 1st of the month continuing through the last day of the month. Update this worksheet daily and be sure you input every penny you spend! If you spend 75 cents on a soda at the vending machine, put it in the worksheet. You will be surprised to see how the little things can add up so fast.
- The final step is to Review your Actual Expenses for the month. Figure out where you are overspending and make cutbacks to that category. Consult with one of DebtWave’s Certified Credit Counselors to get tips on how you can cut back on certain categories. If you don’t see a category that you can cut back on, find additional income. Search for a part time or other ways to find additional income. Revisit Step 3 and 4 every 3-4 months or continue tracking your expenses monthly if you desire.
Call today for a free evaluation at (888) 285-7624 and dial “6” for the education department.
|
|
