You Don’t Have to be Afraid of Your Budget
You don’t have to be afraid of your budget. When people think about budgeting, they automatically begin to think about cutting their spending.
Budgeting is knowing how you spend your money and spending it that way on purpose. If you create your budget with this in mind you can relieve your guilt over spending rather than increase it.
Start with what you spend now.
If you don’t know, then track your spending for a month. Organize all your purchases into categories and see how much you spend in each category.
Compare the total spending to your total income.
This is a discovery phase. Don’t worry if your spending is more than you make. Maybe that is why you think you need a budget.
Just look at the US Governemnt though… not all budgets balance.
The main thing is to know how much you are spending and what you are spending it on.
Compare Your Spending To Your Income
The second step to creating a budget you can live on is to compare your spending to your income. Is it more or less? I’m not going to make assumptions here. You are surviving life so far, so there is a good chance you are already spending less than you make.
If you aren’t, then you have to decide whether you want to decrease your spending or increase your income. Even if you have a balanced budget now, are you able to spend your money on the thing you really want? If not, then look for ways to increase your income. (See the top 10 ways to increase your income below.)
Plan Your Spending
Some people prefer to think of their budget as a “spending plan.”
You will also want to look at how comfortable you are with your current spending patterns. Are there items you want, but put off every month because you don’t feel like you have enough money? Or maybe there are items you buy on impulse, without considering if you have enough money or not?
Once you see what you are spending, you can begin to make your choices more consciously. Moving things around on paper gives you a chance to use the money you have to provide more of the things you really want. Maybe you can cut back on your impulse spending in order to have a little left over for some of the luxuries you’ve been putting off.
Top 10 Ways to Spend Less Money
- Move in with your parents. Okay, that’s a little extreme and it won’t help your parent’s budget that much. But look at your housing situation. Can you live cheaper, can you get a roommate or take in a boarder? Consider creative alternatives to your current living situation.
- Sell your car. How much of your budget goes to feeding your car? You can sell your car and save money on car payments, insurance, and gas. Compare that to a bus pass.
- Go on a diet. I’m not talking about the kind of diet where you quit eating, but more like giving up something for lent, whether it’s fast food or the magazines from the checkout, or HBO. Look for the extras in your life that aren’t giving you as much pleasure as they should for the money you spend on them. Cut them out for a while and save the money instead.
- Get religion.(It doesn’t have to be God, but the same kind of passion and intensity for a cause can help. Get involved in making the world a better place. People who are actively engaged in a cause don’t have as much time to worry about keeping up with the neighbors, or finding something to do for entertainment on the weekend.
- Get organized. You can find things you’ve lost. You can save by making one trip to the store instead of 10. You can restore some of those old treasures and start using them again, or sell them to someone who will.
- Be content with what you have.
- Buy it used. Spend some time at the second hand store or a yard sale and see what you can save by recycling used items.
- “Use it up, Wear it out, Make it do, or do without.”
- Enjoy life more… the simple pleasures that are free.
- Eliminate waste. Turn it off when your done with it. Find good ways to make meals from leftovers. Look at everything twice before your throw it away… what else could this be good for?
Top 10 Ways to Make More Money
- Ask for a raise or a promotion.
- Get a better job.
- Get a second job.
- Do odd jobs. Mow lawns. Babysit. Wash windows.
- Start your own business. Make crafts or cookies and sell them online or at a flea market.
- Look for residual incomeopportunities. Write some hubs. Build your own website.
- Quit saving or investing and start trading. This applies to day trading stocks or options, flipping real estate, or flipping websites.
- Sell stuff you don’t use. Sell stuff your friends & neighbors don’t use. Shop yard sales and then resell the items you purchase oneBay.
- Win the lottery.
- Get creative… write a book, paint something, take some photos or videos. Find a way to market the results. Think about the useless things that people made a fortune on. Pet rocks? What about a little book about “Everything Men Know about Women.” It was blank on the inside and made the author a small fortune. A friend of mine even sold a fart on eBay for $39.95!