As I swiped my credit cards day in and day out to keep my lifestyle afloat, I wasn’t doing myself any favors. I had no idea what my financial picture actually looked like. I was spending blind and happy with my ability to just pay the minimum payment. Minimum payment after minimum payment, I was spending along with cruise control, not knowing where my destination was and not really sure how I was going to get there. I had a problem, a spending problem. The first step to fixing any problem is admission. I had to admit to myself that I was spending my money without a budget. I only knew how much I brought in and what bills I had to pay, but I didn’t go any deeper than that. I needed a budget!
If you are like I was used to be, then you might not have a budget. A budget is not just a spreadsheet with numbers on it. It is your financial plan on how to achieve your goals. Want to save more? Want to spend less on groceries? Any money decision you can think of should be drawn into a budget. They are not just for financial gurus or the mathematically inclined. Budgets are for everyone!
I had to admit to myself that I had no budget. I knew where my money was going, but didn’t know how much and how each month was detailed. I wanted to change my lifestyle and budgeting did that for me. I came up with a simple spreadsheet that allowed me to input my income (paychecks, part time work, etc.) and list my expenses. You can’t just list you bills in your expense column because that is not the whole picture. You need to go back and add everything that you purchase per month on a regular basis. Gas, coffee, medicine, gym memberships, and any other expense that you incur on a regular basis need to be entered. If you want the see how your finances look, then you need to have the whole picture.
While creating a budget can be time consuming, it doesn’t have to be. There are many free budget spreadsheets out there for download, but there are also many great tools online. If you are creating your first budget, then I would recommend trying out the Online Budget Advisor. This free service is provided by Advantage Credit Counseling Service and sets you up with everything that you need to create an awesome budget. It walks you through a step-by-step budget creation from entering your income to breaking down each one of your expenditures, including all of your debts and assets. After entering your information, you get a detailed look into where your money is going and what percentages those categories make up. It is truly eye opening.
No matter what service you use to create your budget, I would recommend just starting one. Many people that I speak to don’t have a budget because they think it is difficult or a waste of time. I would highly disagree with those individuals. How can you create a path to financial freedom if you don’t know where you are now? Budgets are the insights into your spending habits. If you don’t think you will ever stick to updating your budget, then I would suggest you create just one. By taking the time to create one budget will give you more insight into where your money has been going and where you can cut back on your expenses. A budget can be truly life changing and they are extremely easy to setup, especially with the free budget tools available. Remember, the first step to financial recovery is to admit you don’t have a budget!
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