Budgeting. It’s tough. There’s so much to think about, and if you let it, it can overwhelm you. That’s why I’m here with a little budgeting 101 to help you get on track with your paycheck.
Things to Consider When Budgeting
This will be pretty much the bulk of this budgeting 101 crash course. There are some things you need to think about when you’re budgeting. There are some decisions to be made to help your financial health that just absolutely suck, but you still have to do them. I know this from experience.
Do You Need It
First and foremost, when you approach a budget is asking yourself what you need, what you want, and how badly you want it. Budgeting doesn’t require you to give up everything you love, but it does require you to give up some of what you love.
Budgeting is all about making sure you have enough to live on and to be prepared for the future. Depending on your finances, that may mean a lean budget or a budget that’s a little more lenient. Always remember this when you’re giving up something you really like. It’s not REALLY worth a skimpy retirement or college money for the kids.
So you have to ask yourself, “Do I need this?” If the answer is no, ask yourself, “How badly do I want this?” If it’s something you just can’t live without, then table it for working it into the budget after living expenses and savings have been covered. That’s the name of the budgeting game – rearranging, cutting, and adding. You do that until you’ve got a budget that meets all of your needs and some of your wants.
Pay Yourself First
After your needs are addressed, and before you look at your wants, pay yourself. After you take out what you’ll need for bills in your monthly budget, set aside a percentage – the more the better – for savings. This can go towards a savings account, a 401K, a rainy day fund, or all of those. That’s why I said the more the better. The point is that you don’t want to blow through a paycheck without setting aside something for yourself down the line.
Make Those Cuts
This is the part of budgeting that just sucks. I know because I’ve had to do it. You have to make cuts to get the most out of that paycheck. Do you REALLY need to grab that $5.00 cup of coffee every single day? Probably not. Stop eating out so much. If you have Netflix, why are you paying for cable? These are just some of the tough questions and the tough cuts you’ll have to make. I know. It’s no fun.
These simple steps are the key to getting started on your budgeting journey. It isn’t nearly everything you’ll need to think about, but hey, this is budgeting 101, no a week long course. Just following these budgeting guidelines, and you’ll be well on your way!
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