I did a blog a few months ago entitled: A BUDGET? YOU HAVE GOT TO BE KIDDING! about budgeting and the importance of it. Today, I will go into this subject even more because a lot of people make budgeting so hard. Budgeting requires sacrifice yet not the kind of sacrifices which cause you to starve yourself, dress in rags or walk 100 miles to work (an extreme, but you get the point). Budgeting helps you to not only see where your money is going but how to see whether this expense is necessary and needs to be deleted from the budget.
According to Practical Money Skills.com, building an annual or monthly budget comprises of the following:
- Fixed expenses are expenses that stay the same from month to month, such as rent payments.
- Flexible expenses are expenses that change from month to month, such as how much you spend on utilities.
- Total expenses are the combined amount of your fixed and flexible expenses.
- Total monthly income is the income from your job or other resources including investment dividends, pensions, Social Security benefits, rental income and more.
- Disposable income is the money you have left over after you subtract your income taxes from your income
They emphasize to create your monthly budget using this basic Budget Worksheet. If you find you are not able to stick to your budget, it may mean you are spending beyond your means or that your budget is not flexible enough. Take the time to review and readjust your budget monthly until you find a plan that works for you.
You truly have to be serious and disciplined when you budget because you will not only be in control of your money and feel empowered. Budgeting does not have to be a serious subject, just a matter of focus, discipline and being focused on having a great money future. Until next time...
Stay Frugal and Proud,
Dot
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