7 STEPS TO CREATE A WINNING BUDGET IN 2019

          A sound financial plan starts with a solid budget. If you’re planning a vacation or paying off bills a budget is crucial to meeting your financial goals. Here are 7 steps to creating a winning budget:

  1. Understand Your Expenses. “How much are you spending each month?”

Record what you are spending. Gather check registers, bank statements, receipts, and financial files. Microsoft Excel has a nice budget spreadsheet template you can use. Just modify or change any categories, or specific items. All the math is done for you. Open Microsoft Excel click File New Personal Monthly Budget. It has a projected and actual monthly budget so you can track and stay within budget. You can save the file for each month of the year to track your spending.

Personal Monthly Budget
Personal Monthly Budget

2. Set Realistic Goals

After setting up your budget you can see how much money is coming in and how much is going out. If you are spending more than is coming in, you need to look for opportunities to reduce or eliminate spending to improve cash flow. Review categories in your budget and use the projected cost column to set your budget, using realistic goals, for each category. Then enter the total spending for each category in the actual cost column. You can then see the difference for each category and adjust each month to stay within budget.

3. Live Within Your Means

Review your monthly income and live within your means. It takes discipline and sacrifice to stay within a budget until you can do better. To improve your take home pay you may work overtime if available, work a second job. ask for a raise, get that degree etc.

4. Determine Needs and Wants

Make your budget based on your needs first and if extra money is available you can budget for that summer vacation, shopping spree or whatever else you want. Otherwise, use the extra cash to build a cushion so you have carryover each month. Get serious about your needs and wants. When you can see where your money goes you will find ways to save.

5. Build a 3 to 6 Month Cushion For Emergencies

Build a 3 to 6-month cushion in your account to address emergencies such as losing a job, a medical emergency, automobile repair, or replacing a refrigerator etc. You know things “come up” set money aside to pay these expenses.

6. Pay Yourself First

Pay yourself first each month. Invest in your 401K at work a percentage you can afford. Try to contribute an amount equal to your company matching. Most companies match between 3% to 6%. That is free money Folks!

7. Put Your Budget into Action

Balance your budget with your income. It may take a few months to adjust but once your budget is balanced you will be more in control of your life and reduce stress. Take control of your spending. It is good Money Sense.

In conclusion, following the above 7 steps will have you on your way to a winning financial budget plan and is good Money Sense.