The Importance of Living Within Your Budget
Everyday we struggle to make both ends meet by having a job so we could support our lifestyles. Everyday we make financial decisions whether to buy a new gadget or not, to spend your salary for a vacation and eventually asking yourself, “Where does all my money go?“
An infographic from Lifetuner.org gives us some starting points to reference where are problem spending areas might be. While the figures may be very idealistic depending on your income/debt ratio, I believe that it’s something to strive for.
Living within your budget may not be easy, but it’s worth it. If you think that it’s too difficult, try debt. Below are just some of the steps which I found effective in living within your budget.
1. Establish a budget
You can never live within a budget if one doesn’t exist. A budget may be divided into basic necessities expenditure (utility bills – water, electricity), food, car, etc), health, entertainment, savings, etc. I love this simple sample budget from MyMissionTransition.com (the figures of course are just for sample purposes and not real) or you may want to view this customizable basic budget worksheet from GetRichSlowly.org. It is appropriate for either single or married people with or without children.
Another favorite budgeting strategy of mine is the Envelope System (Precious, my fellow Sexy Saver, shared her income allocation strategy here) where you separate your money and put them in envelopes that represents your expenses. It has worked well for me and my mom especially during the time when we were really stressed with our financial obligations. It helps remind you to really squeeze your frugality and spend only what’s inside the specifically labelled envelope and to never be tempted to get cash from other envelopes.
2. Stick with your budget
The second most essential way to live within your budget is to really stick with it. There’s simply to sense of establishing one if you’re not going to follow it. To start with, make sure that everyone in the family is aware of the budget so that everyone could cooperate and help each other in strictly following the budget. The children or your partner should encourage each other if all of the family members are aware of where the finances should go.
3. Avoid unnecessary expenses
While the point of working is to be able to spend your money on your desired places, it is important that you avoid expenses that don’t necessarily become healthy and are not aligned on your budget. These unnecessary expenses may include (but not limited to) expensive vacations, luxury items and expensive gadgets.
Identify which areas should your income go, establish a budget plan and stick with it. Not always easy but start trying today. It gets harder when you don’t try to try.