I was so obsessed with our budget a year ago (an excel spreadsheets with formulas on it) that i would check it several times a day. My obsession has declined and i check it now at least twice a week, but i still love the idea of budgets. If you are on track to get out of debt, a budget is a MUST HAVE tool. Some of the many benefits that my wife and i are enjoying out of budgeting are:
- We are able to identify how we are spending money now.
- We are able to see variations on our monthly expenses and nail it to the specific.
- We are able to track and evaluate our current spending and set goals for reducing the expense item (if it‘s not a need).
How to make a budget system work
Use a written budget
There is a ‘something’ that happens when you write down stuff. I personally think that it‘s a commitment call- because you are signing to do what the document says. Avoid the ‘mental budgets’. Write it down and find that ‘something’. If you are married your spouse may not be mind reader- and the more the need to spell it out.
Use a computer application
There are so many free budget spreadsheets that you can download online and tweak them as you wish to fit your need. We are in 2010 and technology should be your friend.
Watch out for money moles.
These are items that secretly eat your cash and are not itemized on your budget. Items such as starbucks coffee, lunch with friends, and such miscellaneous expenses can accumulate to a huge chunk of cash. Keep a close eye on them.
Put tithe on your budget
Human beings are not naturally inclined to give; especially when you are drowning in debt, it’s even hard to think about it. But when it’s on the budget with other items like rent, food and clothes- then you start having a different perspective. This is the first thing we did after we got married and embarked on the journey to becoming debt free.
Spend less than you earn
A no brainer concept -but statistics shows that about 43% of American families spend more than they earn each year. Refuse to be counted here.