Most of us know someone greatly affected by the economic downturn of recent years. They may have lost their jobs, their home or may have health problems that prevent them from seeking work. You also may have noticed that the effects of their economic hardship may have been amplified lacking a financial plan. Many financially-savvy families have lived for years religiously within a budget. It has become part of their lifestyle. Others have lived paycheck-to-paycheck. Still others are one paycheck away from bankruptcy. Do you find it important to have a personal budget and savings? Do you have money for a rainy day?
If not, developing a budget may be of great help. A budget is a blueprint to your financial future. It can be simple like setting aside envelopes of cash to cover each monthly expense category or more elaborate computer software that tracks your expenditures. The important thing is to have a household budget and to stick to it.
Here are some tips.
- Avoid envy: Don’t confuse having drive, determination and ambition with envy. Having these three attributes means you have a goal; buying a house, saving for retirement or your children’s college, etc. Envy is wanting to keep up with the Jones. The Jones may just be keeping their head above water.
- Keep your life simple: Focus on your basic necessities to avoid unnecessary debt. Many of us are still paying for the pair of shoes or the dinner we charged five years ago. Not controlling the use of your credit cards will ruin your budget.
- Save money before buying: To keep yourself out of financial trouble. You may save 15% if you open a store credit card, but you may end up paying 200% for the item you’ve purchased. Buying in cash will force you to avoid taking on more debt.
- Living within your limits does not mean you cannot live a rich productive life. We have to work with what we have. Yearning for the things we don’t have will cause frustration and discontentment. Live within your budget and live richly.
See more articles on creating and using budgets.