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Saturday September 23rd 2017

So You Set A Budget…Now What?

Setting a budget is an important financial responsibility every individual should do. A list of total household income and expenses should be calculated and written down in order to get the most accurate picture of a person’s financial lifestyle.

Review and Reevaluate Budget Regularly

Once the initial task of compiling a budget is accomplished, it’s essential to review it several times for accuracy. Check all of the individual items in both the expenditure and income sources categories. See if they’re truthful and be honest. Then recalculate the grand totals several times as well to be certain no unintentional errors were made when using the calculator. Once this is done, and the budget feels totally accurate and honest, then it’s time to put the budget away for a short time. But it then has to be revisited on a regular basis. Every month is a great idea because changes in expenses and income can happen in any given monthly period.

Stick to the Budget

It’s essential to maintain adherence to the household budget. Don’t be tempted to overspend in any expenditure category that was itemized on the budget. If $200 was the average estimated utility bill for each month, then make sure to keep electrical costs down so that it’s only $200 again the next month and not more. Don’t deviate with any other category as well. Don’t feel that more has to be paid on the credit cards or that it’s necessary to double up on the car payment just to try to get ahead of the game financially. Stick to the maximum allowable monthly expenses and also try to maintain the same income levels as originally calculated in the budget.

When a person ignores his once carefully thought out budget. it’s inevitable that problems will arise. There won’t be enough money at the end of the month to pay all bills on time and maintain a strong credit history. Or expenses will get out of hand for unnecessary materialistic temptations that will prevent the person to be able to save or invest the amount budgeted for at each monthly interval. Discipline is the key.

Set Short and Long Term Monetary Goals

One of the best effects of setting up an intelligent and accurate budget is that individuals can gain psychological satisfaction by planning short and long term monetary goals. If $250 a month is dedicated to be saved out of one’s gross monthly income, then a short term goal can be to save a few thousand dollars as a down payment on a car that would help the household out. A longer term goal with this same amount of monthly savings can be to accumulate enough money to help pay for college expenses down the road.

These goals can come right out of an accurate and steadfast budget, and it makes a person feel completely in financial control of his lifestyle instead of living in constant fear about where his next dollar will come from and how he’ll end up never paying for substantial purchases and investments in the future.

It’s not at all difficult to accomplish these tasks when setting an intelligent budget. All it takes is a little bit of determination, planning, discipline, and awareness of an individual’s overall financial picture at a given point in time.


10 Personal Finance Basics

What are the big things you are going to need to buy in the next few years? A car? A house? Financial goals are not as hard to establish as you may think, and they are the only realistic way to work toward the things you really need in life.

1. Identify Reasonable Goals

Financial stability means different things to different people. Figure out what you want to do with your money that would make you feel the most comfortable in the long run. Make a list of the goals you want to accomplish in the next ten years, and then make a list of the average expenses of each goal.

2. Prioritize

Once you have your list of goals put together, look at each item and rank it in order of importance. For example, sending your son to college would probably rank higher than taking a cruise to Alaska. Rearrange the list so that the things you want the most are at the top.

3. Make the Tough Choices

Not all of your big financial goals are going to fit nicely together. You may have to sacrifice one in order to keep another. Remember that every dollar you spend on one item is a dollar you won’t have available to spend on something that might be more important to you in the long run.

4. Plan Ahead

Give yourself plenty of time to achieve your financial goals. Take advantage of savings accounts and investments that will help your money grow over time so that you will have more when you need it later.

5. Practical Considerations

Remember to include goals that will help keep you and your family financially secure. Think about creating an emergency fund for unexpected expenses. Begin to build tuition funds for young children. Create retirement savings that will take care of you in your older days.

6. Include everyone who is Directly Affected

If you are married, make sure that you discuss your financial goals with your spouse. Talk with your children about the financial goals that include them.

7. Begin Right Away

Getting your finances in order is like going on a diet. It’s really easy to say you’ll start next week or next month and then never get around to it. Once you choose to create a solid financial plan, put it in order and start using it as soon as possible.

8. Maintain Discipline

Daily spending is the hardest to control. Every time you think about making a big purchase, remember what your goals are. If the goals are really important to you, they will be enough to keep you from blowing your cash on something you don’t really need.

9. Give Yourself some Breathing Room

Budget in some walking around money so that you never feel too limited. It’s important to have a little flexibility to purchase less expensive items when you want them.

10. Make Changes as Time Passes

As you and your family get older, your financial situation and goals will change. Revisit your plan every three to five years and make changes so that it fits reality.


Ways that Planning Ahead Saves Money

Many people are taking a growing interest in saving money in any way possible. When making large purchases, such as a car or a house, we all plan ahead and analyze the choices that we have so that we can get the best deal. But many of usneglect to do the same thing for common everyday items. If you save $100 on a TV, but waste $1 on 100 small purchases, where is the savings?

Planning ahead for all of your purchases saves you a lot of money in the long run, as you will be less likely to buy on impulse, have more time to think about what you are buying and see if there is any way that you can get the same item for cheaper.

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