Budgeting has been one of the most used word in personal finance. But what is a budget and how do we implement it? A budget is you telling your money what to do. You have to tame your money like a pet. You have to make your money behave, and written plan is the whip and chair for the money tamer.
You can still tame your money even if you’ve failed at budgeting before. Here are some of the most useful tips on budgeting. With these tips, I’m sure you can create a budget plan that you can live with.
Tip 1: Stock up on will power. As with any other goal, you need to have a will power on budgeting. Think about what you want your money to do for you. Setting goals may seem silly at first, but it can help in a suprising way. Your goals provide a driving force. Goals get you fired up, and getting fired up is very important in taking control of your money.
Tip 2: Recruit an ally. If you’re married, remember that two heads can be better than one. Do not bring the budget down from on high like ten commandments and present it to your spouse as the law of the land that she should strictly follow. Work on the budget together, compromise, and come to an agreement. Don’t be too tight on a budget. Learn to enjoy sometimes.
Tip 3: Be flexible. Do you plan to design a permanent budget once and stick to it exactly every month? You probably need to be more flexible. Don’t try to have the perfect budget for the perfect month because we never have those. Doing a budget is not a one-time deal. You must set up a budget every month. We don’t spend exactly the same for every month. Learn to be flexible but at the same time conservative in spending.
Tip 4: Assign every peso. Keep this goal in mind every time you work on your budget. Spend every peso or every dollar on paper before the month begins. Have a budget plan every month. Give every peso or dollar of your income a name. That means every peso or dollar should be assigned to a spending or saving category. Look at your monthly income and match it up with the month’s savings, bills, and debts until you give every income peso or dollar an outgo name.