Budgeting is a tool that I believe should be used by everyone, maybe even more-so those who think they have strong finances. It educates you on where your money is going and empowers you with the money you choose to spend and invest. I’m a huge believer in capitalizing on cash-back rewards and points using credit cards as long as you can afford to pay them off monthly. I’m going to share a few free resources and tips to help you get the ball rolling.
1. Create financial goals like paying off debt, investing in retirement savings, saving for a trip, etc. I love the website https://www.daveramsey.com/dave-ramsey-7-baby-steps/?gclid=EAIaIQobChMIw5Oz8fzE5gIVr__jBx13jgffEAAYASAAEgJnNfD_BwE
2. Gather all the info you can find about your monthly expenses: car and home expenses, insurance, property tax, food, education, clothing, utilities, etc. If it’s an annual payment, divide it by 12 and get a monthly estimate.
3. Gather all income information.
4. Budget-out every dollar of your income into your different categories. Include savings and charitable donations in your budget. I love the app Every Dollar (there is a free version or a subscription version which automatically updates with your bank account).
5. Consider using cash for food and personal expenses- those are the two areas easiest to overspend.
6. Watch as your debt melts way and saving grows! The first goal (after having a $1000 emergency fund) is eliminating debt and THEN investing in your future.
7. Update your app at the start and end of each month. It takes a little time but it’s crucial in knowing what you actually brought in and what you actually spent. Some areas may have overage or underages and that’s okay as long as we try to stay working budget. Consider saving any extra or using towards a trip.
Even if your income exceeds your needs, one major home, health, or catastrophic incident could change that so it’s important for all income levels to be financially-wise. A savings is there so you don’t panic if something happens, you have that to fall back on. Start small. I noticed that the money I had budgeted to spend, I spent with less stress because I knew I wasn’t going over my limits. It was empowering and I know I have a grip on things now! Plus, less purchasing means less clutter!
Keep your finances in perspective from a faith-standpoint too. God has blessed us with what we have. Money is meant for exchange. We work to earn it, we use it for what we need, and the cycle continues. It’s temporary. Don’t fear letting it go. God gives us guidance in the Bible about our finances and expects us to be good stewards with what we have!