A monthly budget is a useful tool to help you to plan what you can afford and plan to purchase it. Contrary to what many people tend to believe, creating a household budget is an uncomplicated process, even as simple as noting down each expense and keeping track of it for a month.
A household budget helps you to identify the areas in which you spend, and take the necessary steps to curtail expenditure on those items that are non-essential and unnecessary.
Household expenses often spiral out of control because we have no idea about how the total outgoings are created. Once a household budget is in place, it becomes much easier to bring things under control.
Doing a budget for the first time can be an "eye-opening" experience. You may see the full extent of your debts and spending for the first time. This can be a great incentive to make a start on.
Major benefits of budgets:
Acts as a roadmap
Builds new habits
Accelerates financial goals
Being financially prepared helps you to deal with emergency and unexpected situations without too much stress.
So how should you start?
Once you have a record of what’s actually happening you can start to decide what your financial priorities are.
Spend some time planning your priorities and setting financial goals
Now create a new budget that reflects your goals.
Try to implement your new budget for three months. Observe what is and isn’t working and adjust it accordingly.
While budgeting requires some time in the early months, learning to maintain a budget will pay dividends in ways never imagined. Schedule monthly budget reviews and stick to a strict plan to bring the financial health of the family in line with the goals. Reward yourself for staying within the budget and remember that not all rewards are monetary.
One of the most important items to save for is your retirement. Not a lot of us think this far ahead and only visit this issue when the pressure to save becomes a necessity.
But you don’t have to wait till the last minute to get started on your savings goals, not only for retirement but also for big life goals.
Members of The Singles Sisterhood can use the workbooks we have created in the Investment and Pension Planning for Singles eCourse. These workbooks will help you to track your current income and expenditures to ensure you have enough to retire on or reach your other life goals.