5 Rules for Budgeting Your Money

No matter how an individual manages their money or how they budget it, there are some simple up front rules everyone should follow. Depending on individual goals and circumstances, individual budgets and money plans will look different, but the same five rules for budgeting matter.

When you look at your money on a monthly basis, which is suggested, it is imperative to do so in a way that will give you the best financial snap shot of where you are and what you are spending your money on every month. With that said there are five rules that apply to every budget and financial plan that should be not overlooked.

5 Budgeting Rules

Rule #1 – Give Every Dollar a Name at the Beginning of the Month

Rule #1 might be one of the hardest parts of setting up a budget. Giving every dollar a name is not an easy thing do to if you are just starting out on a budget. This gets easier with time and the more consecutive months you budget because you can use history to see where you spend. Giving every dollar a name at the beginning of the month creates a map for your money and takes away guilt and stress when you make purchases because you already planned for it.

Rule #2 – Plan For Big Expenses

Knowing what big expenses will take place in the future provides a cushion and allows individuals to save early before they come. This step is critical to keep debt at a minimum and keeps the credit card hidden when bigger expenses arrive. Big expenses include insurance bills, property taxes, kids sports, washer and dryer die and many more. The further into the future these expenses are see the earlier they can be planned and saved for.

Rule #3 – Track Every Expense, Even the ones you do not want to write down.

People do not realize it, but five bucks here, 25 bucks there, all add up in a big way over the span of a month. This is why it is important to log the coffees, the trips into the gas station and every other expense. If it hurts to write down and track, that is an green light to cut that expense.

Rule #4 – Pay Bills, Save, Then Buy

Every individual needs to pay the bills first. If it was bought or used, it should be paid for first. Once the bills are paid, save. Some people will call this paying yourself first. It is important to get that money out of your general spending account so it does not slowly disappear. Next, buy what you want. That is why you work and take care of your money in the first place. Buying things is fun, especially when you plan to buy them.

Rule #5 – Keep your Cool, Every Month Changes

When you start out on your budget it is easy to get confused, depressed and fed up with how it is going. This is normal and happens to everyone when they set out to track their money. The idea here is to be flexible and to keep your cool. With a budget, you have to fight through and just keep moving. Over time you will be able to predict where your money is going a lot easier than when you start. Budget setting and tracking can also cause fights because one person wants to spend and the other wants to save. This is a perfect situation. Keep your cool and keep talking about your budget and your goals. The arguments will eventually go away.

Final Thoughts on Budgeting

These simple 5 rules are just guidelines to help people on their journey. They are not set in stone and you do not have to follow every single one. The key is to track your spending and know that issues will arise at different times throughout the year. This is a process and one that will need adjustment as you go. Each individual will have to find what works best for them and adjust their budget to what fits in their life. There is no one size fits all approach here and these five budgeting rules will help pave the way to a better financial future.

If you need a hand to figure out your budget and your future…

Hit me up and I will get you on the right track. Helping people is where my heart lights up every single time.

Facebook – https://www.facebook.com/FBOFB

Website – www.fbofb.com

Instagram – @fbofb.life