Guest Post by Wes Brown entitled, “Start 2011 Off Rig
ht: Budgeting.” Wes Brown is the owner of W K Brown Financial Services, Inc. As always, we sincerely thank you for sharing your knowledge with us.
A new year means new financial goals and resolutions. How do you want to improve your finances in the new year? Create a budget? Save more money? Get out of debt? Here's what you should focus on in 2011.
Everything You Need to Know About Budgeting (Part 1 of 7)
Budgeting is the foundation of every financial plan. It does not matter if you are living paycheck to paycheck or earning six-figures a year, you need to know where your money is going if you want to have a handle on your finances. Budgeting is not all about restricting what you spend money
on and cutting out all the fun in your life. It is really about understanding how much money you have, where it goes, and then planning how to best allocate
those funds. Here is everything you need to help you create and maintain a budget.
1. Budgeting Basics
Do you know why a budget is so important? On the surface it seems like creating a budget is just a tedious financial exercise, especially if you feel your finances are already in good order. But you might be surprised at just how valuable a budget can be. A good budget can help keep your spending on track and even uncover some hidden cash flow that might free up even more money to put toward your other financial goals. We will discuss this topic in more detail in part 2
2. How to Create a Budget
The hardest part of creating a budget is actually sitting down and actually
doing it. It is like staring at a blank piece of paper when you need to write something and that first step seems like a massive hurdle. Don’t worry, I’ve broken down the budget creation process into a few easy to follow steps. You’ll be able to sit down and create a basic budget in just a few minutes. I will break down the steps in part 3
3. Three Traits for Budgeting Success
Once you have taken the time to create a budget, the next step is to make sure you follow it. Budgeting can be like going on a diet—you start with good intentions, but after a few weeks or months you drift away from your plan. Do not let it happen to you. Here are a few basic traits that will ensure budgeting success. Part 4
4. Basic Budget Worksheet
If you’re having difficulty coming up with all of the various expense categories for your budget, I have created a budget worksheet that will help you organize everything. This worksheet has the most common expenses and will help you keep track of everything in an orderly fashion. Part 5
5. How Overspending Breaks Your Budget
The main reason to create a budget is to help you keep your finances under control by keeping track of how much money you’re spending and where it goes. When you begin to stray from your budget it is usually because of spending too much money somewhere. But if you have a budget that tells you exactly how much you are supposed to spend, why is it so easy to overspend? There are a number of reasons we overspend, so when you understand what causes overspending, you can help put a stop to it and keep your budget on track. Details in Part 6
6. Try Using Cash to Keep Spending Under Control
Swiping plastic has become incredibly easy. With both credit cards and debit cards, we can be in and out with a purchase in a matter of seconds. Unfortunately, this convenience comes at a cost. By using plastic we can begin to lose track of how much money is actually being spent. Sure, two dollars here, 4 dollars there, it does not seem like much at the time of purchase, but if you are not careful they can really add up and bust your budget. One trick to help keep your daily spending under control is to use cash instead of your credit or debit cards. cialis order It might not be as fast, but it helps you visualize just how much money you are actually spending. More on this technique in Part 7
Sometimes, you may need a house or car ...