Money can be hard on relationships, hard on individuals and can make people feel completely lost and hopeless. There is the old saying the money doesn’t buy happiness, but most of us want to try! We may not all become rich, but there are some things that can be done to achieve some stability.
Why Do We Need A Budget?
This seems like a simple question with a simple answer, but there are a few reasons that we need to have a budget.
- What is the end game: There is something that we want. Know what it is from a car to retirement. Whatever the end goal is, be honest and keep that in the front of your mind. When budgeting, have a picture or a reminder of the goal.
- Know how much you have: If the money in the bank and the money that is budgeted are planned, there is less chance of spending money not available.
- A budget helps with all situations: A budget plans for the known and the emergencies. Knowing that there is money budgeted and saved for a worst case scenario leaves less stress.
- Sleep better: Financial stress is one of the primary reasons of restless stress and tension in a house. When money is budgeted and everyone knows what to expect, there is less stress and better sleep.
- Better ultimate end goal: Everyone will retire and pass on. When there is a budget, retirement is easier knowing what there is to spend. With a budget that includes saving, there may even be money left as a legacy for loved ones.
How to Budget:
There are a few ways to budget.
- Erin Skye Kelly is a financial planner. One of the strategies that she teaches is to budget with an old fashioned spreadsheet or a journal. There is something about having to write down what is spent is also holding the spender accountable. Companies such as Bromwich and Smith have professionals to help as well.
- Another strategy is the envelope method. This is physically putting money in envelopes and spending only what is there. This option can be a little tricker today with the debit card and online shopping.
- Another budgeting method is the 50-30-20 method. This method is based on spending 50% of your income on needs such as housing and groceries. Then spend 30% on wants such as movies and treats and 20% on saving (this is your end goal).
There are some apps for that can help with budgeting if old fashion spread sheet is not working.
- Mint budgeting is an app by Intuit. This app mimics the spreadsheet planning, it is easy to see what is spent and what is left in each budget category.
- Goodbudget is an app that uses the envelope method, but electronically. It will also download banking information so that when money appears in the bank it is sorted into electronic envelopes. This can be shared my multiple people so everyone is on the same page.
- Moneywyn is a budgeting app that uses the 50-30-20 method.
Budgeting can be confusing and leave people feel overwhelmed. There are a lot of great resources out there, do not let pride prevent getting help. Budget today, live for tomorrow.