Over the previous three weeks and six blogs we have gone through the very basic steps of creating a fairly comprehensive financial plan. Regardless of if you will engage someone to help you with your finances and go the whole way and indeed create a financial plan there is one area that needs to be addressed for you and your family’s financial health. No matter where you are financially if you want to get ahead or move forward it is very important to develop and maintain a budget. If you do not know exactly how much money you are bringing in on a regular basis and also do not know where your hard earned money goes how will you ever truly have a handle on your finances? In order to maintain a healthy relationship with your finances it is imperative to be able to answer the previous question about your money. Think of it this way, once you know where your money goes you can begin to achieve financial freedom by budgeting, limiting, and managing your expenses. While it is true most people do not budget those who are getting out of debt and beginning to save for a house, a child’s education, or their retirement have a very good idea about where their money goes. In other words they do in fact budget to some degree.
I owe a great deal of thanks to my mother as she started with me and my sister at an early age to begin the budgeting process. When I was younger obviously my budgets were very simple. I earned an allowance, made extra money doing odd additional money doing extra chores, and even did filing for my dad as he was a salesman who worked out of my childhood home. In the beginning it was very simple, I earned a little money and I saved for things I wanted such as toys, then clothes, and finally my life beyond my parent’s home and protection. This was before the age of personal computers and well before such helpful tools as spreadsheets and the age of the Internet. I started out with a single sheet of paper that was divided into what my income sources were and what my few expenses ended up being. Like most kids, and people in general, I did not like doing the budget much less adhering to it but even at a young age I saw the benefits of developing a budget. Again thank you to my mom.
As times and methods have changed since my first budgets one thing remains consistent and the same, they help and they work. On the homepage of this very blog I have a tab where you can buy a spreadsheet I developed that will help you budget in a fairly easy and painless manner. In it there is room for up to 90 expenses in addition to your income. You determine where your money goes and how much will be allocated to each line item. Daily or however often you want you simply input the amounts in one of the twelve month’s tabs that are broken down by days. There is a tab in the spreadsheet that will show you how you did with your budget and it performs a comparison for you. It is a simple and direct approach to budgeting that I have used for many years. The main drawback is you need the file with you or access to it in order to input your expenses.
Enter web based programs and now you can achieve the same results from any computer with Internet access. No longer are you tied to a single computer or forced to carry a thumb drive with your spreadsheet file with you. During the month of July I will use two methods to budget a mixture of my own expenses and income mixed with some fictitious figure to make things interesting to show how by budgeting and knowing where your money is going can help you get on top of things. I will purposely develop a budget that is negative on cash flow and as the month develops we will explain the adjustments that will be made. Now for the web based programs I will be using Auto Budgeting which has a nominal fee of $38 annually. For more information on this wonderful program for budgeting visit Auto Budgeting.
These blogs over the next month will be in addition to my regular blogs on financial issues that appear on Tuesday and Thursday of each week. These special blogs on budgeting will post on Sunday until we examine the final post the first weekend in August. I do recommend everyone budget and yes I will promote the two methods I am using in the blog, the spreadsheet I developed and Auto Budgeting which is an affiliate of mine. Regardless of how you decide to budget the important thing is you do budget. Please try one of these methods or develop your own but do not give up on yourself and your finances. For more information on budgets feel free to look under my Amazon books where I have an eBooklet available for $0.99 which helps to dispel the myths of budgets. I look forward to taking this journey and explaining budgets over the next month or so.
