Having a budget is great and is probably one of the most difficult things for people to do. To sit down and create a realistic budget can be scary and the reality check some are not ready for but should be. All kinds of fears, excuses and mind games come into play why people don’t create budgets. A personal budget should not be complicated nor based in fantasy.
In order to be successful with budgeting you need some time to sit down and work the math.Over time this time span will become shorter and shorter. For now set aside at least 45 minutes to an hour for creating your personal spending budget.
Dave Ramsey has a template that I use for my budget. The key aspect is the priorities of the budget. The 1st six lines items of my budget are tithe, Rent (Shelter), Food, Gas (Transportation), Clothing and Utilities (not phone or cable). After I am full and have a safe warm or cold place to rest and can get around I can now address all other bills. This was a major mental shift for me because my priority was not to ruin my credit but after listening to one of his workshops it became so crystal clear. What do I want more food and place to sleep or good credit. The answer was easy and then budgeting became easy.
Now my food allotment is not extravagant but I am full everyday and that is important. All my other bills are paid when I have the money to pay them and it works out so far. Some bills get their money a bit later than others but everyone is getting some money from me every month.
However sticking to it and not running over is the next difficult thing to do when it comes to you and your money. In the spirit of accountability, in February I was over $23. My back account wasn’t affected, WHEW! How did this happen? My job cut hours and my side gigs are coming to an end. Now I know I have to replace that income an fast. There is the point of sticking to your budget. If I didn’t have a budget and if I didn’t review it, I would be in the dark longer and probably wold have created more financial mess. Staying with the life class analogy, by not reviewing my notes I would have failed my first test.
But how or why did I not stick to budget? The best answer is unplanned expenses and not having a emergency fund/cushion. Financial Advisers, including Dave Ramsey, tell people to save money for an emergency fund. Yet, I gambled that if I could pay off my 1st tier of bills then I could regroup and start saving. Well maybe I should rethink things…
Maybe I can sell some inventory on eBay. If anyone has experience selling on eBay please contact me.
To find out if this Bright Idea #1 worked or to read the latest post in the Become Debt Free Series, click here.