How to Effectively Budget When the Money's Running Out
The other day I was talking with my mother-in-law about the dreaded budgeting topic. She said she didn't bother budgeting because she already knows that she spends more money than she has. So apparently, if you're operating in the red then budgeting serves no purpose.
This is a common misconception of people. If there isn't enough money, why bother budgeting in the first place? If you're wondering how to budget (or even why you should) when money's tight, then read on.
If you'll do the exercise of taking a look at what you have in your account and deciding BEFORE you spend, what that money should be doing, you'll make progress -- even when there are more bills than money to help! Don't give up! Look at that pile of money in your checking account (even a small pile) and make sure every dollar is given a purpose: rent, eating out, utilities, etc. The mental process that you go through here is vital.
Given the situation that there's not enough money, you'll likely run out of money before you run out of bills. The whole process will still produce great results though! Prioritizing your money means you're maximizing what it can do for you at any given moment. That's important in figuring out how to budget.
The second step is to be certain you're recording every single penny that you spend. Realize that even if you're spending and driving a deficit, the task of recording your spending MANUALLY will mitigate the deficit-spending as much as possible. Your total deficit will be much lower as a result and you'll be in a better position than had you not done it at all.
The exercise of manual recording increases awareness and strengthens the psychological connection between you and your money. These days, every other interest out there wants you to spend your money without considering your own circumstances. This is hardly a way to budget! Record your spending and you'll become painfuly conscious of where you can shave spending.
In conclusion, looking ahead, and recording your expenses as they come helps you budget as well as circumstances allow. The damage won't be nearly as bad, and you'll be able to record that much quicker once you can turn things around with a long-term plan.
This is a common misconception of people. If there isn't enough money, why bother budgeting in the first place? If you're wondering how to budget (or even why you should) when money's tight, then read on.
If you'll do the exercise of taking a look at what you have in your account and deciding BEFORE you spend, what that money should be doing, you'll make progress -- even when there are more bills than money to help! Don't give up! Look at that pile of money in your checking account (even a small pile) and make sure every dollar is given a purpose: rent, eating out, utilities, etc. The mental process that you go through here is vital.
Given the situation that there's not enough money, you'll likely run out of money before you run out of bills. The whole process will still produce great results though! Prioritizing your money means you're maximizing what it can do for you at any given moment. That's important in figuring out how to budget.
The second step is to be certain you're recording every single penny that you spend. Realize that even if you're spending and driving a deficit, the task of recording your spending MANUALLY will mitigate the deficit-spending as much as possible. Your total deficit will be much lower as a result and you'll be in a better position than had you not done it at all.
The exercise of manual recording increases awareness and strengthens the psychological connection between you and your money. These days, every other interest out there wants you to spend your money without considering your own circumstances. This is hardly a way to budget! Record your spending and you'll become painfuly conscious of where you can shave spending.
In conclusion, looking ahead, and recording your expenses as they come helps you budget as well as circumstances allow. The damage won't be nearly as bad, and you'll be able to record that much quicker once you can turn things around with a long-term plan.
About the Author:
Learn how to budget in 10 days with Jesse Mecham's free personal budgeting course. Don't keep making the same budgeting mistakes!
posted by Credit Counseling at
6:08 AM
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