A budget is the number one tool for financial success. No matter how much money you make, or how little money you make, you absolutely need a budget to manage that money properly. Create a simple budget plan by listing out your monthly bills, expenses, and spending. Then, list your monthly income. Subtract your monthly income by your spending and assess what is left over. That left over amount (also known as profit) is what can be used to allocate money for fun and to your financial goals. One of the most important reasons to include the things you love in your budget is because it allows for sustainability. Constantly telling yourself not to spend money on things you love sets you up for failure. Instead, factor an amount you can afford into your budget. When you know you can afford to spend money on fun things, you won’t feel bad for doing so.
Here’s a glance at this episode:
- [01:25] Learn to take the emotion out of budgeting. A budget is simply a tool that provides you with information on what should be happening with your money.
- [02:40] When creating your own budget, it’s important to make sure all of your bills, responsibilities and priorities are covered first.
- [06:39] There is an exception to the budgeting-for-fun rule: when you’re working towards a tight savings deadline, fun spending may be put on hold temporarily.
- [10:30] Don’t be afraid to experiment with your budget month over month. Look at each month as a fresh start to find a money routine that works for you.