In the first part of this personal finances article we talked about creating a budget. I know, I hate the word budget too because it feels so confining or restricting. But what is actually going to happen when you create a personal budget for yourself or your family is just the opposite. YOU will gain control of your life. YOU will gain control of YOUR money. If you missed the first article make sure you read through it before you continue on to this next section.
Okay then, here we go….
If you are one of the lucky ones and your income covers all of your expenses, then you still may want to consider putting some more money away for retirement or possibly even into some investments. Cut out some unnecessary things in your life. You won’t miss them I promise you. By doing so you might even be able to save enough money for some college fund investments for your children or perhaps your retirement fund.
Sometimes I have time to listen to Dave Ramsey, (he’s a financial radio talk show host in Nashville, TN). Anyway, one of the things he really advocates is to start an emergency fund of $1000. My wife and I started doing this and it has helped us more than ever.
You know the drill – let’s say you’re driving down the freeway and one of your tires blows out. Then let’s say you have to call a towing service and then you have to buy a new tire or two or even worse a set of tires. Remember that little stash of money you have been putting away called an “emergency fund”. It will now come in handy.
Let me repeat thyself – – – Having an emergency fund will ensure that if any unforeseen events should stick their head up (Murphy’s head) then you will be able to cover those expenses and not have to use your already maxed out credit cards. That’s another problem, credit cards. Most of us don’t know how to use them and therefore it gets us into trouble. I’ll write more on that later in another article.
My granddad always said to pay yourself 10%. Did I listen? “NO”. I spent it as fast as I got it. But not any more, if I make some I put some back. If I make a lot, I put a lot back. Take a look at your debt reduction such as credit cards and loans. Would it make sense to pay one off? Probably. So take a serious look at doing this.
WATCHING LATE NIGHT TV…
The other night I was watching Susie Orman and she said something that a lot of us haven’t followed. I know I haven’t in the past but I can tell you that I certainly am now. She said that if you can afford a $500,000 dollar home, then you need to buy a $350,000 home. The point: don’t always push your budgetary spending to the max.
STAYING ON BUDGET!
Most all of us really do have financial goals. If you have lost them, pick them up, dust them off and put them back into your thinking and actual “Doing”. Get realistic about those financial goals. And begin to make a plan to attain them again. Be smart, be wise and most of all be practical with your thinking. Start small, yes, okay, I’m going to say it – start with baby steps and move on from there. YOU CAN DO IT!!
Maybe one of your goals is that you need a little vacation but you can’t afford that trip to Maui yet. Heck, start with getting away with a mini two-three day vacation. My wife and I use to do this all the time. There are many little get-a-ways just 1-3 hours away from where you live now.
You may need a new car. Well maybe not a new car but at least “transportation”. Save up for a good used one then. Having a home budget can and will help you save money and to make those dreams or goals a reality.
CREDIT CARD DEBT
The numbers are absolutely staggering as to how many people are feeling the weight of credit card debt today. You need a budget to get control of your spending habits. Without it, it is almost impossible to make much headway in reducing your financial debt. With a personal budget you will be able to start eliminating your problem areas with your account balances. If your financial budget numbers are way off, meaning your income is below your spending, it may take some time to get it under control but you can make those adjustments. And when you do your life will not feel like it is spinning out of control. The goal here is for you to control YOUR money, not the lack of money controlling your life.
The ultimate goal is for you to be able to live well above your means, to be able to put some money into investments or savings, and to get rid of your outstanding debts such as credit cards, car payments and eventually the big one, your mortgage. Having a budget will be the best thing you could do for yourself and your family. If you don’t have a budget form yet, pick one up at our website.
So get to it. Take control of your money and don’t let it control you. You’ll be glad you did.