I think if I had to list the top problem most people face today, it would be money issues. Too often we struggle to rob Peter to pay Paul, and we end up too far in debt to relax and enjoy life. Creating and managing a budget can really help you get your finances under control. People tend to shy away from the word budget because it makes us feel like we’re living under a microscope and that we’ll never have any fun with our money. Nothing can be further from the truth though. Creating a budget simply helps you track where your money is going. And when you know where it’s going, you can make a plan to send it somewhere wiser.
Some of the things you may want to consider as you work on your budget may include:
- Set goals for what you want in life and for how you’re going to financially get there. Unfortunately, it’s easy to drop a few dollars here and a few more there, then find out you’re short at the end of the month. Once that happens and the bank adds on their overdraft charges and the credit companies add in their late fees, you just keep sinking deeper and deeper in debt.
Setting a goal helps you target what you want and how you’re going to get there. It’s easier to not spend those dollars on impulse items when you remember the long term goals you have. Writing your goals down can help you remember them.
- Keep track of what you’re spending. You may be very surprised to find where your money is going! I carry a small notebook in my car to jot expenses down. That way, I have a monthly account of where my money went. This helps me focus on what I really need verses what I want. I’ve found that if I wait a bit before making a purchase, in many instances I won’t spend the money because I’ve decided that having the item isn’t worth going into debt to get it.
- Think very hard about credit purchases. I have found that my credit card is great for emergencies, but in most other instances, I either don’t need the item, or I shouldn’t be buying it anyway! With interest rates ranging from 12 to 24 %, credit card debt can be very difficult to repay.
- Dedicate at least a small amount every paycheck to your saving account. If you don’t make a habit of it, you won’t put the money away. It’s so much better to have that nest egg to fall back on in the event of an emergency than it is to add it to your credit card and then have to keep paying interest on it.
- Be willing to make some adjustments in your lifestyle if necessary to get things back on track. I’ve been working with several veterans looking for a budget they can live with, and it doesn’t work to start out with expenses over what your income is. You may have to look for a smaller apartment, or think about getting an older car rather than the beauty you’ve been looking at, but it’ll pay off in the end with better mental health and a stronger financial status.
Don’t let your finances run your life. You can make a difference in your spending habits and you can pull yourself out of debt. It’s not easy, but it’s sure worth it!