It is more common than we think. Most people don’t have the habit of budgeting. The simple thought of the word makes them apprehensive.
Others get by life “controlling” their finances only by their bank account, paying the bills and randomly saving whenever they can with little purpose. Eventually, they go into debt or keep asking themselves why I don’t have enough money to buy what I want.
That’s why a Budget is fundamental. It allows you control to have money for what you need and some more for things you want, to treat yourself. Here are some reasons:
Starting a Budget means, in other words, to organize your finances to achieve control and enjoy a lifestyle that suits your needs without debt.
What matters for Budgeting?
There’s a simple equation:
Income - Expenses = Savings
Your Income has to be enough to pay your bills and leave room for Savings. Of course, in order for the math to work, you must understand your monthly expenses.
The first advice is to collect your bills. Make a list of all the payments you have to fulfill in a month. Then, on top of it, consider your Income.
The balance should be positive, which means you have some money that can go to a separate Savings account for goals.
If your results are negative, don’t panic! It means you’ll need to cut some expenses. Maybe you’re spending a lot on groceries or leisure. Anyhow, it’s fixable.
To add to the benefits, another motivation to create a budget is planning well-planned results. Imagine a dream vacation, the desire of buying a new car, getting your kids to college; these are all feasible achievements a budget can provide for you. When you know your finances and what your control can do, it becomes easy to plan and expect more of life.
Another reason to budget is to avoid going into debt. Most people don’t realize the size of the snowball they’re into until it’s too late. We are not saying you won’t face debt. Probably, we all have some debt; after all, a credit card is a sign of probable debt. However, some debt for a short period of time is acceptable as long as you work yourself out of it.
Lastly, increase your Credit. Manage your account and expenses well, is a crucial step to improve your credit score. It will be helpful whenever you decide to get a mortgage or a future loan.
This is a good basis to start your budget.
So, What’s the Best Way to Work My budget?
There are a few options available. You just have to find the one that suits you best.
If you are not a fan of computers, phones or anything technological, the correct approach for you is the old notebook. Collect your bills, bank statements, receipts and create a filing system by the month together with a log notebook. It’ll be a handful to put it all together, however, once you’ve found your path, it’s a done deal.
Some people like to use spreadsheets. If you ace Excel or at least feel comfortable working with this tool, it’s also effective.
However, if the technology is your ally, there are lots of apps for budgeting available. You are able to control your finances on your laptop, phone, on the go. It’s your choice. Also, since the options are wider, we recommend you analyze what each tool offers.
You will want an app/tool that offers:
- A monthly basis for expenses
- A daily log (great feature on the go) (hopefully we will be able to get some form of log but there is not really such a thing available – that is because cash still exists and that can only be logged manually)
- Saving Planners - definitely the best feature to achieve your dreams.
- A tool to help you manage debt
- Family Planners - specific tools to facilitate your family budget
- A tool with unlimited expenses control.
You could ask the advice of a Financial Advisor or even your bank manager, it’s really up to you.
How Can We Help?
We want you to control your money and be stress-free. Having a tool that does most of the work for you is our main goal.
We present to you: YBP. An online tool that facilitates your way of Budgeting.
YBP is easy to use, quickly updated on your laptop or mobile (on the go). Its array of features was created to simplify your experience and transform your budget into something manageable and trustworthy.
Want to know more?
Click on the link below.
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In summary, learn the basic principles of Budgeting, get organized, choose a tool and achieve every goal to improve your life and guarantee your happiness, stress-free.