Make a Budget to Help Your Dreams Come True!
By Monica Resinger
A budget is a very important tool when you are trying to meet
financial goals. It helps you to see where your money is going and
therefore helps you determine where you can cut back. It also gives
you something to go by when you get paid rather than piddling your
money away. If you are serious about managing your money, a budget
is an absolute necessity.
When my husband and I first got married over 14 years ago, we had no
idea of how to manage our money. Well, my husband had a little idea,
but not me. I worked but I was very frivolous and piddled my money
away. We always had a hard time paying our bills because of this. I
had nothing to show for my money except make-up, restaurant reviews
and other un-necessaries. Then my son came along and changed all of
that. I wanted to be a stay-at-home mom.
We also wanted to have more money to travel, save for retirement and
college funds, and purchase our own home. This was our motivation
for preparing a budget. We knew we had to start managing our money
better to be able to do these things and it seemed impossible to have
any of it at the time but we had to start somewhere. You should do
some thinking as to why you'd like to have more money. Everyone
wants to have more money for some reason or another. When you think
of reasons, write them down at the top of a piece of paper. This
will help you stay on track and give you motivation to stick to your
budget.
So anyway, we made a budget and we stuck to it because we had our
goals in the back or our mind -- first and foremost, to be able to
stay home and raise our son. The way we made our budget was to list
out everything we HAD to pay to live. We listed rent, power,
garbage, phone, gas and food and the amounts we paid on them in a
month. Then we listed our credit card bills and the monthly minimum
payment amounts. We listed miscellaneous for items like clothing or
birthdays that come up. You can list your budget list on the paper
that you listed your reasons for wanting to save/manage money.
You'll have to put some thought into some of these items such as food
and gasoline. Be sure to be accurate and honest about how much you
spend on these items. Look back into your checkbook and add it all
up. If you write down less than what you actually spend, it will be
harder to cut back.
Once we had made our list of everything we had to pay, we looked at
it to see if there was anywhere we could cut back. We saw that we
could probably cut back the money we spent on food by using coupons,
shopping sales and discount stores, so we lowered the amount we
originally budgeted. We saw that we could probably cut back the
amount of money we spent on gasoline by making fewer trips to the
store, only driving when absolutely necessary, etc. So we lowered
that amount also. We vowed to cut back on our power usage -- turn
off lights when leaving a room, dry clothes on the line, wear
sweaters so we can set the thermostat lower, etc. We stuck to these
amounts and made it.
At first we didn't have any money left after paying our necessities
but that was okay because we had a roof over our head and I was able
to stay home and raise our child. As my husband got raises then
eventually started his own yard service, we began to have a little
extra money left after our budget was paid. This enabled us to go
out once in a while and add a new amount onto our budget
called `savings'. Our savings account is where we strive to save for
vacations, home improvement, retirement funds, etc. We currently put
20% of our income in there.
Within a few years, we were able to purchase our own house, remodel
it a little at a time, make our credit card bills smaller (we
eventually hope to be rid of them), buy a nice car and truck and
visit Disneyland and Knott's Berry Farm. The reason I tell you this
is to show what can happen if you do make a budget and stick to it.
