Budget. Most folks cringe at the word. Some even consider it a straight jacket for their wallet. But consider this: a budget is simply a roadmap to guide you into better saving and spending habits.
Typically life follows the same road — a monthly paycheck and expenses for groceries, mortgage, new shoes for the kids, etc. But occasionally you may find yourself on an unexpected side trip to the doctor or needing cash for car repairs. Are you prepared?
A budget can help you wisely manage everyday spending AND plan for the unpredictable.
The #1 cause of a family crisis is overspending. The instant gratification of buy now, pay later can certainly lead to unnecessary debt and stress. Instead, learn to become more aware of your priorities on where to spend your hard earned income, and the satisfying feeling of being in control of your money. You can master your money! We'll help show you how.
How to begin.
It all starts with that pile of monthly bills, a pen and paper, and good batteries in the calculator. Or you can download one of our FREE Budget Tools from the Financial Tool Box [ XLS : PDF ] box above and get started right away. Simply enter your regular monthly income and expenses, plus amounts commonly spent on "extras" to create a roadmap of where your dollars travel each month.
Then, check to see if your monthly budget is cruising down a straight road or whether you're taking lots of detours. Compare your budget to the "Spending Wisely" guidelines to see how to get back on track.
Sound hard? Not really. Ask yourself: Can I spare 30 minutes to map out my future?
Where does your road lead?
Now that you know your regular expenses, determine how much of your income is left at the end of the month. The Disposable Income that remains (or doesn't!) indicates your financial health.
Nothing left over? Take a critical look at the "extras" or unnecessary expenses and look for creative ways to save — even if it's just a little. What would you save by taking your lunch to work once a week? Are you overspending on hobbies, personal care, or entertainment? Cutting back can often provide extra cash without being painful.
Need a compass? Try online banking!
PCB's FREE Online Banking can be a very helpful compass for monitoring expenses. "Real-time" online banking shows every transaction practically at the time it occurs, including debit cards, checks, deposits and more. Plus, you can even schedule Bill Payments online — no more stamps or late fees. And balancing your checkbook couldn't be easier with Online Statements. Click here now for a demo!
Select a destination.
Set a financial destination (one goal or maybe more), and then break it into manageable trips. Let's say you want to establish an emergency fund over the next year. By saving $50 a week you quickly accumulate $200 a month, easily arriving at $2400 fund in 12 months. Congratulations!
Empower yourself! Do you want to pay off a loan faster? Save for a new car? Decide what's important to you and your family. And reward yourself when you meet a goal.
Staying on course.
Know what motivates you. Be sure you understand why you want to change.
Be flexible. Don't punish yourself if you take a wrong turn – just turn around.
Your trip is unique. It may take more than one way to get your finances back on track.
Be realistic. Changing habits takes time.
12 Reasons Budgeting Can Improve Your Life
1. A budget is a guide that tells you whether you're going in the direction you want to be headed in financially. You may have goals and dreams but if you don't set up guidelines for reaching them and you don't measure your progress, you may end up going so far in the wrong direction you can never make it back. Can you imagine the government or a major corporation operating without a budget? No, and neither should you.
2. A budget lets you control your money instead of your money controlling you.
3. A budget will tell you if you're living within your means. Before the widespread use of credit cards, you could tell if you were living within your means because you had money left over after paying all your bills. The use of credit cards has made this much less obvious
4. A budget can help you meet your savings goals. It includes a mechanism for setting aside money for savings and investments.
5. Following a realistic budget frees up spare cash so you can use your money on the things that really matter to you instead of frittering it away on things you don't even remember buying.
6. A budget helps your entire family focus on common goals.
7. A budget helps you prepare for emergencies or large or unanticipated expenses that might otherwise knock you for a loop financially.
8. A budget can improve your marriage. A good budget is not just a spending plan; it's a communication tool. Done right, a budget can bring the two of you closer together as you identify and work towards common goals and reduce arguments about money.
9. A budget reveals areas where you're spending too much money so you can refocus on your most important goals.
10. A budget can keep you out of debt or help you get out of debt.
11. A budget actually creates extra money for you to use on things that matter to you.
12. A budget helps you sleep better at night because you don't lie awake worrying about how you're going to make ends meet.
Source: American Consumer Credit Counseling
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