I Suck at Budgeting!

budgetFor years I have struggled with keeping a budget the way most advisors say it should be kept. Being involved in business, I have always been surrounded by numbers and finances. Since I’ve been involved in businesses since the 80s, most of my research was done the old-fashioned way, going to the library and borrowing books. Each and every book I have read throughout the years only repeated the same information…you must keep track of everything that comes in and goes out.

Budgeting is the lifeline for everything in life, whether for business or personal. All the books say you must keep track of everything you spend money on, no matter how small the amount is. Seriously, having  a full-time job, running two businesses, taking care of my dad who has epilepsy and Alzheimer’s and a single mom, its difficult keeping track of the small expenses. The notion that you cannot budget correctly unless you account for it all is a set up for failure for many, especially when you are not used to using lists and budgets to keep track of it all.

Budgeting has to be realistic, and should cater to everyone’s level of budgeting ability. You should keep track of when your payments are due, since most money gets spent on overdue and late payment fees. Making sure your payments are made on time teaches discipline and can enable you to move from living paycheck to paycheck to just living. As long as your  bills are paid on time, too much shouldn’t be spent stressing on the little things you are spending money on. Eventually you will take everything into consideration, but it takes practice and discipline, take baby steps. Don’t force yourself to change your habits overnight. Forced things never stick, and you want to be able to practice good budgeting skills as if it was second nature.

One thing I do stress from the beginning is to make savings and an emergency fund a required monthly bill. An emergency fund is money that you use in an emergency, just like the name implies. It is customary for financiers to say you need at least six months of living expenses set aside in an emergency fund. This will enable you and your family to survive, whether it be because of loss of employment/income, natural disaster, etc. When starting an account like this, you can account for anything, besides your monthly expenses, that you want to make sure its covered for, in case of anything. You do not need to start setting aside large amounts, starting by setting aside as much as $1.00 is all you need. We always make excuses when it comes to saving funds, but saving money is a learned practice that increases over time. You set the bar with the amount every month. Over time it will increase as your budgeting practices get better.

A savings account is separate from your emergency funds, because buying a car or a house is a luxury and not an emergency. A savings account is for whatever luxuries you want to buy. You want to go on a vacation, it comes out of your savings account. You want a new car, the deposit comes out of the savings account. Just like the emergency fund, you can start saving as little as $1.00 until you get used to the practice. As your budgeting gets better, you will automatically increase the amount of money you set aside and before you know it, you can afford to give yourself certain perks that were not possible before.

Budgeting doesn’t have to be hard or a burden. Keeping track of finances is hugely important, since many aspects of our lives are controlled and dominated by money and credit. Here’s a simple MONTHLY BUDGET PLANNER I have created to make budgeting easy. Good credit starts by budgeting and keeping track of credit obligations. I have included simple instructions with planner and I hope it helps you with your finances as much as it has helped me.