Personal budget needs to have an objective beyond the financial to work out
Having a personal budget is key to a healthy (financial) life, but the first mistake you can make is to think that your goal is only financial.
Finance Guide budgeting is more than controlling spending, it is designing a life plan - in which money is only a facilitating agent.
Facing this way makes it easier to start this complex but incredibly rewarding process.
And to help with this task, we've put together a definitive Finance Guide to all the steps to have a well-done personal budget and achieve your goals.
Why have a personal budget?
This should be the first issue resolved before starting the process.
In addition to the above, it is important to know that a personal budget will help you get a clear picture of your financial situation, review spending habits, control impulse spending, and waste.
All this will enable you to plan your future, have a reserve for emergencies, take advantage of opportunities and still have a healthier relationship with money.
That is, WIN is not over yet!
Where to start?
Now that you have a complete sense of all these aspects, how do you make a personal budget?
First, make a survey of your income and expenses.
Recipes is all that you get - the meal ticket also comes in here, plus rentals, investment interest, etc. Just be sure to note the net amounts and do not consider credit card limits and overdraft, after all this money is not technically yours and you pay to use it.
Expenses are all that you pay and are divided between fixed expenses - rent, condo, water, electricity, gas, etc. - and the variables - leisure, food, etc.
Use paperwork to track expenses
Already it was the time that personal budget sent the Excel worksheet. In times of mobility, nothing better than having the information in the palm of your hand, to consult anywhere, in an uncomplicated way.
For this, just download the app paperwork. With it, you can receive all your accounts and pay them directly in the application, in order to avoid paying interest and penalties for any delays.
In addition, you'll have all the spending information in the palm of the hand, sorted by type, generating super intuitive graphics. All this, in a simple and clear, with few clicks.
Put the PDCA to spin!
There is a management tool widely used in the corporate world called PDCA - plan, do, check, adjust.
And that's Finance Guide exactly what you need to do with your personal budget when you finish raising your income and expenses:
PLAN - plan your spending, especially the
DO - implement your plan
CHECK - keep track of your progress on a monthly basis
ADJUST - Make the necessary adjustments of everything that can be improved and ... repeat!
With this routine, you'll be able to stay in line and perfect your personal budget every month.
Variable expenses: the villain who can become a hero
In the adjustment phase, you may think that variable spending is the biggest villain of your life.
After all, car insurance is a fixed expense, but paying the deductible on account of a crash, for example, is one of those variable expenses that give a headache and ache in the pocket as well.
On the other hand, it is they who give the greatest flexibility when it comes to economizing.
If renegotiating the rent is complicated, making adjustments in spending with leisure is easier and these small savings can bring great results.
Need an incentive?
Doing all this is not easy, and harder than getting started is keeping yourself in the budget. The tendency is to start with all the gas and get discouraged - as with physical activity, you know?
Not to fall into this temptation, we have 4 valuable tips:
1) Set a goal
Take a trip? Car exchange? Buying a property?
It can be anything as long as it suits your reality. That is, it is no use defining the purpose of buying a property if you are sunk in the overdraft.
Start with something closer - in this example, get rid of debt - and go dreaming higher with each new milestone you've earned.
2) Set a deadline
It's no use having a goal if you do not have time to get there.
Without a deadline, you may end up pushing with your belly and losing the purpose of making a personal budget.
So, set a deadline - also doable - to achieve your goal and move on.
3) Set a value
How much do you need to achieve your goal?
If it's a trip, make an account of how much it will cost you. Quantifying your goal is essential to track evolution.
4) Make a plan
Will it only cut spending will be enough to reach your goal? Or do you need to take off extra money? How are you going to do that?
Planning what needs to be done to reach a goal is the way to achieve it.
In short, having a personal budget needs to have a greater motivation than simply controlling spending and a good deal of discipline.
But the results can appear in the short term and in the long run will make all the difference in your life - financial and personal.
Posted on June 13, 2018 at 03:02 PM