Budget Basics how to Set up a sensible Budget

While most financial advice starts out something like this: “to find financial freedom, you must create a budget”. Over and over we hear about the importance of budgeting and tracking our spending and it’s a wonder that budgeting is not a federal requirement for all people. The reason why budgeting is so often mentioned is because budgeting really does work. It can help you get back on track and it can help you manage your money properly.

However, no matter how well budgeting can work for you, you still have to work for your budget. Just as not everyone is cut out to save money naturally, not everyone is designed to create and follow a budget. Many will attempt many times to establish something on paper, only to stray away from it shortly afterward. Budgeting does not come easy for all people. It is a process and it takes a commitment. Budgets tend to fail because the user tends to fail their budget.

So how can a non-budgeteer get better at mastering the craft of budgeting? Here are some simple tips to move past your bad budgeting days and make it a positive and life long money habit.

Figure Out What Motivates You
Many people have the best intentions when starting out with a budget but without a specific purpose most budgets will end up failing. When it comes to creating a budget, you need to have a reason behind it that will help motivate you to stick with it. Your ultimate goal in budgeting is likely that you want to get out of debt or retire at a certain age. Whatever your reason, whatever your goal, consider your motivation behind your budgeting practices.

Figure Your Figures
In order to create a budget, you have to know what you are dealing with. The only way to know where your money is going each and every month it to track your spending for 30 days straight. Most people will stop at this step and never move forward with a successful budget but tracking where each and every penny goes will help you set up your budget and give you some room to cut out the unnecessary spending we are all prone to do. Forget the fancy software. Just grab a convenient sized notebook that is easy to carry with you everywhere and make sure you are tracking all monies spent.

Be Reasonable
While it is fine to have certain expectations, it is worthless to have unrealistic ones. Do not expect to go from your usual lifestyle to the most frugal person in the world overnight. It is an unreasonable goal that you will likely never attain forcing you to throw in the budgeting towel. Start in steps. Take baby steps and build up from one goal to several reachable ones. See where you can make some cuts and increase your savings potential.

Make It Work For You
With so much talk around about different financial tricks and methods to save and manage your money, it can be tempting to believe that every system will work for every person. One of the key things you need to remember is that you only need to worry about what works best for you. Just because your parents or your best friend uses one method that works does not mean that the same method will work for you. It may take several tries before you come up with a system that really works for you an that will enable you to stick with it for the long-term.

Go With The Flow
Remaining flexible is very important on the road to financial freedom. Life will throw curve balls and if you are not willing to go with the changes, you won’t be very successful. Maintaining a budget requires on-going work and changes. Be open to new ideas and ways of doing things.