Personal Budgeting

Are you having trouble sticking to a budget? Are you trying to save some of your paycheck each week/month but finding it impossible to do? Managing a personal budget is tough for everyone (remember, if it was easy everyone would have a fat savings account and/or no debt!) However, it IS possible if you follow these three easy guidelines.

The first rule to keep in mind is that you should never have more money going out than you have coming in. Sounds simple, but lots of people have more expenses than they have income. One contributor to this problem is “plastic” – you know, credit cards! Lots of people run up high credit card balances that they cannot pay off each month. It is okay, perhaps even a good idea, to use a credit card to help you establish good, strong credit. That means charging a small amount (what you know you can pay in full when the bill comes due) then paying off the balance. But it is not okay to make huge purchases for items that you could truly live without (like a new 50-inch flat-screen TV.)

Secondly, decide how much money you can afford to spend on non-essentials such as eating out for meals, going to movies or playing putt-putt. Once you have a specific amount in mind, set it aside and use it for those things and nothing else. When that money is gone, you can’t allow yourself to pull money from other places in your budget to spend on those non-essentials. As a side note, you should always pay yourself a little something out of every paycheck. This should not be considered a non-essential; in fact, quite the contrary. Even if all you can afford to deposit into a savings account is five dollars a week, it is better than nothing. You won’t miss small amounts and before you know it you will have a nice little chunk of change to cover emergencies or a special purchase. This will also keep you from having to use a credit card in those instances.

This brings us to the last tip, using your WILLPOWER! Again, if it were easy everyone would be doing it! It’s like eating only two cookies when you really want 10; it takes a lot of willpower. With your budget, you must exercise self-control to resist urges to spend money you don’t have or charge an item you will not be able to pay for later. This may be the most difficult task because just about anything we want can be easily had these days. Those with “good credit, bad credit, no credit” can buy cars, houses, and many other big-ticket items. Denying yourself takes amazing self-discipline but you can do it!

Personal budgeting can be an overwhelming task when you first set out to conquer it. However, following these three guidelines will help keep your budget manageable and help you maintain control over your finances. Don’t let them control YOU!

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