It’s no secret that the state of today’s economy isn’t as good as it could be. People are finding it more difficult to make ends meet, and there’s no sign of things getting better any time soon. A budget makeover is a must, and gives you the opportunity to do more things with less money. With that in mind, here are few tips to get your budget into shape.
1. Be honest. Your budget will only work if you are honest about how much you spend and how much income you have. When doing your budget makeover, it’s important to not be judgmental about previous expenses, no matter how foolish or unnecessary they may have been. Your goal is not to feel guilty about the past. Your goal is to use your budget to have a better future. The honesty rule applies to all members of the family, so be sure that you also avoid being judgmental towards them.
2. Set priorities. A budget is really about setting priorities for how you will spend your money, and those priorities will also help your budget makeover go smoothly. Food, shelter, heat and clothing are real priorities; magazine subscriptions, fast food, cable television and computer games, while nice, are not real priorities. However, you can have all of those things and more if you can fit them into your budget. The main idea is to start at the top of your priority list and work your way down until you run out of money.
3. Be realistic. It’s perfectly natural to want to do everything with your money, but it can take a while to get to that point. A budget is a tool that will help you to do that, but it’s not something that will happen overnight. In short, you need to be realistic. This idea also extends to how you allocate the money in your budget. If you like to eat out once in a while, then figure that into your budget instead of assuming you will never eat out again.
4. Flexible vs. fixed expenses. Generally speaking, expenses are either fixed or flexible. Fixed expenses are those that are the same every time, such as rent or a car payment. These are easier to work into a budget because you always know how much they will be. Flexible expenses vary from month to month, and are harder to budget for; however, you also have more control over them, which make them a good choice for trimming some fat from your budget.
5. Revise. Remember, your budget is how you tell your money what to do, not for your money to tell you what to do. You should review your budget every month (don’t worry, it gets easier every month) and revise it as necessary. As time goes by, your budget makeover will improve your financial situation more and more, giving you the opportunity to make the most of every penny coming in.
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