It’s summertime! Plenty of sunshine, blue skies, traveling, and lots of barbeques. This is a wonderful time of year, but it’s also a time of year when we tend to spend more and fall off track with our monthly budgeting.
If you’ve fallen off track, that’s ok. It’s not about the “fall”, it’s about “how you react” to the fall…
Are you going to continue falling deeper off track? Or will you regroup, re-evaluate, and make the necessary changes to get back on track? We’ve all been there, but we get a new day to start over and do things differently.
When making a plan for your money you must start with the basics, which is a budget. There are so many creative ways to make a budget that works best for you.
Three important areas to focus on when budgeting are Saving, Bills and Spending.
Before you start spending or saving any money, you must first decide:
- How much income you have each month. Make a list of all income you receive, whether if it’s from an employer, your own business, government benefits, child support, alimony, etc.
- Deduct your expenses. Once you have that income total, you will then be able to start deducting your expenses. If you have irregular income, meaning the amount of income you receive each month varies, then take a look at your last three months and use the lowest income number as your income number to work within your budget each month.
Saving is a requirement, not an option. Always pay yourself first. Many times we pay bills, have fun and then when we think about saving later. By that time, we don’t have any more money left to save. We must change our mindset about saving so we can become more proactive and productive with saving.
Start by saving money before you pay anything else. Every time you receive money from anywhere, whether if it’s from your employer, your own business or if someone gave you money as a gift, still save some. Even if it’s only $20.00, still save it.
Some savings is better than no savings. Small amounts can add up to large amounts over time. So start small and stay consistent so you can build it up. Whenever you received unexpected money, try to save all of it. Sometimes we tend to feel like if we receive extra money, then we just have to spend it on something.
Instead of spending it, save it. Whether if you’re saving towards emergencies, new car, vacation, or retirement, it’s clear that saved money is indeed a requirement. Start today and create an action plan to remain consistent with your savings goals.
Bills are important because we must pay them in order to live our day to day lives. We must be able to financially support our basic needs for housing, transportation, food, and clothes. Start with those basic expenses first, such as rent, mortgage, electricity, water, phone, food, clothes, and gas.
If you don’t have a car, set aside money for Uber, Lyft, bus, train or subway. Once you’ve paid those basic living expenses, start paying all of your other bills in order of importance. Car note, car insurance, internet, life insurance, renters insurance, health insurance, hair, nails, waxes, Netflix, etc. We all have different expenses. No one’s household is the exactly the same.
Start by listing all of your expenses in order of importance. Always pay all of those basic expenses first, then pay everything else afterward.
If you are in a position where you have more expenses than income, you should take some time to determine if you have an income problem or a money management problem. Once you get clear on which problem you have, take action on increasing the income or improving your money management skills.
Make sure you make time for fun and self-care. Too many of us are constantly moving at the speed of light, taking care of everything and everybody, but as a result, we neglect ourselves. We all work too hard not to enjoy life. Many of us underestimate the fact that we only have one life to live. Start living it with purpose and excitement. Set aside money within your budget to do something you enjoy each month.
Just like we have to work to earn money to love, we must take time to enjoy life and relax so we can strengthen ourselves mentally, physically and spiritually. Do whatever makes you happy.
You could get a massage, have a game night at home, go swimming, or watch a movie. Remember, there are many things to do that are free, but we must put money aside for those things that cost.
We must also remember to set aside money for those little things that we tend to forget to count, such as eating out, snack machines, lunch money for the kids, randoms invites to events, etc. Always set aside money in the budget for those planned spending items and the unplanned random items. Once that amount has been used, stay disciplined and remind yourself, once it’s gone it’s gone until next month.
Now it’s time to work! Let’s get started on your August 2018 Budget. You can write it on paper, use an excel spreadsheet or an app. Choose the options that work best for you.
Sidenote: Throughout the month, it’s ok to adjust your budget as life changes. If you start the month with a plan, it’s so much easier to make changes when those unexpected events occur.
Contributor: Cleo Childress