Personal budget planning is one of the most painful-yet-essential financial skills you can possibly learn. Though it might hurt to ration out what you can and can’t spend, it’ll change your financial future forever.
Planning your finances without a budget is like trying to make a map without a compass — success just isn’t very plausible. You need a plan. As the old adage goes, “If you fail to plan, you plan to fail.”
So we’ve compiled the following articles to help guide you to creating the perfect budget for your life. Read on:
Planning Your Budget
Before you actually begin writing your personal budget, you’ll need to first analyze the principles of a sound budget. Remember, budgeting isn’t just about making ends meet before your next paycheck — it’s also about making sure your debt and retirement are taken care of.
- Why You Need a Budget
- What to Include in the Budget
- Make Your Savings Automatic
- Spend Less Than You Earn
- Track Your Expenses With Quicken
Making the Budget
- How to Budget For Free with Quicken Online
- How to Budget with the Envelope System
- How to Budget with Microsoft Excel
Though budget is absolutely critical to financial success, don’t forget that it doesn’t inherently mean you’re going to follow through. A plan is just a plan — a plan without action is utterly pointless.
As William Feather humorously explained:
“A budget tells us what we can’t afford, but it doesn’t keep us from buying it.”
Writing a personal budget is a great step forward, but remember: it’s called budget planning for a reason. A budget is a plan — not an action. Unless you actively stick to your budget, it’s simply a waste of time.
Before You Begin
Before you write a budget, you first have to see your expenses. Mint Online is a free service that lets you track your money online. You can hook it up to your bank, track how much you spend on gas, check out your grocery bills — and no, you don’t have to spend a dime.
It used to cost $36 per year, but they just released it for free. I’m surprised they did, to be honest.
This is a great way to track your money with a software, without counterproductively spending money. Mint is owned by the most trusted personal finance software provider out there — I’m surprised their letting their online software be used for free.
It’s a more fun way to get ready to track your expenses for your budget plan. Regardless of whether you use a software or an old fashioned pencil and paper, you’ll need to find a way to track all of your expenses — otherwise, you’ll be budgeting blind.
But Wait! There’s More!
Budgeting is just the first step. If you find that you’re spending more than you earn, then you have to options:
It’s literally that simple. Whether your trying to save for college, get out of debt, or plan for retirement, it doesn’t matter. If your budget shows that you’re spending more than you earn, you have to up your savings or up your spendings. There’s no other way.