Do you want to know the secret of getting rich? Stop giving your money away! Use the simple tips and tricks in this post to create a monthly budget that works for you…
Stop Giving Your Money Away ~ Create a Monthly Budget that Works for You!
I know you must feel that way too, or you wouldn’t be here reading this.
I absolutely detest making a budget and what’s even worse is I hate following one.
I know how to do it and I’ve tried all kinds of suggestions and how-to’s. But knowing how to budget and actually following through on it…now, that’s a whole ‘nother story.
Every January, I say this is it…this is the year that I will create a budget and actually stick to it through the whole entire year. But, somehow…every year by mid-summer, I’m robbing Peter to pay Paul.
Because I don’t prepare ahead of time. It’s not like I don’t know this.
It has nothing to do with how much money you make. It has nothing to do with how many bills you have.
The reason most people don’t follow a budget is simply because we don’t prepare. We don’t plan ahead!
It’s sad, really.
But, one thing I’ve learned is, you have to create a budget that works for you.
Once again I’m screaming at myself (and maybe you too…if you want) –
Stop Giving Away Your Money! Create a Monthly Budget that Works for You!
Why do I say “stop giving away your money”?
Because those that don’t budget their money end up paying late fees and interest rates. Plus, non-budgeters often end up spending more money on entertainment and emergencies because they don’t plan ahead for these circumstances.
Why do I say “that works for you”?
Because it doesn’t matter how many budget books you read…it doesn’t matter how many budget planners you buy.
If the budget system you’re trying to use doesn’t fit your lifestyle, it’s just not going to work!
How to Create A Monthly Budget that Works for You
What time of year is the most expensive for YOUR family?
Create a budget list that includes all of your monthly and annual bills.
Next to each bill, write the dates they are due.
How much do YOU spend each year?
Back to that bill list you just made…
Next to the dates due, write the amount due for each bill. Write the annual amount if possible. If not, multiply the monthly amount by 12 months to get an estimate of your annual bill.
Mortgage/Rent – $800.00 x 12 = $9,600
Electric – $150.00 x 12 = $1,800
Cable/Internet/Home Phone – $150.00 x 12 = $1,800
Groceries – $600 x 12 = $7,200
Insurances (Health, Car, Home)- $1500 x 12 = $18,000
Cell Phone – $150.00 x 12 = $1,800
Utilities (Heating/Air Conditioning) – $2,500
Add up your total amounts…
Total for the example above – $42,700
Notice, there was no entertainment or fun category on that list…just your standard household expenses.
Scary, isn’t it?
Okay, now below your “important” bills, write down “Entertainment” and “Emergency/Unexpected”.
How much do YOU spend in your entertainment category each year?
The entertainment category should include all the fun stuff you like to do or buy, including your “gift” budget for friends and family.
For this example, we’ll say $3,000.
How much should YOU have in your emergency category?
The emergency/unexpected category includes everything that is “significant” in your life. Of course, health emergencies are at the top of this list, but you should also budget for household emergencies like if the furnace breaks or your neighbors son throws a baseball through your bedroom window.
Let’s say another $3,000 for the example…
That brings our grand total of annual expenses up to…
Now here comes the ultimate question…
How much do YOU make each year?
Is it enough to cover all the budget you just created?
Back to the bill list…
Using the example from above, your annual expenses are $48,700. Divide that by 12.
The total pay out in bills (or savings for future bills) each month is $4058.33.
If your income is not enough to cover the total you got from adding up your expenses, then you need to cut back.
Start with the least important thing on your budget list. Entertainment. Then, move onto Cable, Internet, Cell phones, etc.
Call the companies that provide you these services. Explain your current situation and see if they can lower your rate. If not, cancel your services and look for something comparable in a more manageable price range.
As you can see, budgeting is personal. No 2 budgets are the same and it doesn’t matter how many systems you try.
You have to create a budget that works for your life. Using your money and your expenses.
Just answer these simple questions to create a monthly budget that works for you –
How much do you spend each year?
How much do you make each year?
Is it enough to cover your expenses?
How can you lower your budgeted expenses to fit within your income?
I hope these budgeting tips help you make 2016 your most prosperous year!
Have a Spectacular Day!
Vanessa Hamlin is the owner and founder of Food Life Design and VLHamlinDesign. With her passion for frugal living and homesteading, Vanessa loves to write about easy recipes, making money, gardening, home remedies and everything else that a good life entails! When she’s not writing for Food Life Design or creating products for VLHamlinDesign, you’ll find Vanessa reading, drawing, gardening, cooking or spending time with her family.