Saturday, 16 November 2019

Simplest Budgeting Method To Save Money Ever

Budgeting

In this article, I'm going to share one of the simplest strategies for budgeting and saving money so you can build a better financial future for yourself. I think this is something that many people overlook but it is by far the most important aspect of personal finance. 

I have friends who are making $2,000 to $3,000 per year, yet they're still broke because they don't know how to manage their finances properly. It doesn't matter if you're making $10,000 a year or $10 million-dollar a year, it's very important to take this systematic approach for budgeting and saving money, investing money, and doing it properly.

I'm going to share a couple of different strategies that you can use in this article right now.

Lets Get Started


Why Do You Want To Create A Budget

It's important to understand your reason for creating a budget for wanting to save money. And in many cases people just saying well, I want to save money and increase my wealth. Who wouldn't? But you want to dig a little bit deeper than that, because, this is what can help drive you towards reaching those goals and setting those goals that you may have. And that is by understanding your why. 

Maybe you have a wedding coming up, maybe you want to go on a worldwide trip around the would for a year and you need to save some money for it. Or maybe you just want to retire much earlier than the average American who retires at age 63, maybe you want to retire at age 50, 45, 35, some people can retire at an early age because they're able to do a budget.


Run Yourself Like A Business

One of these things that I think is so important to do and I've been doing this for a number of years, the way of viewing this is to run yourself like a business. I run myself like a business with my personal finances. Imagine a business trying to profit, trying to make money without tracking their expenses, without writing down all of their expenses and all of their income. Imagine a business trying to do that, how would they know the profitability, how would they profit? In many cases, they wouldn't. That's how 90% of people in the world are, they don't keep track of it, they try to run the numbers in their heard.

Businesses will have a number of different financial sheets, they have a number of different things that they go through and track numbers on.


Cash Flow Statement

It's not difficult to understand the basic concepts of this, but let me just show you one here. You can plug in all of your income, any money that you might have coming into your bank account or coming into your possession, maybe it's your salary, maybe you're on an hourly wage, whatever it maybe be, you have a pension coming in, some type of retirement funds, you have social security payment or maybe you have dividend payments from stocks. Whatever income might be coming in would be your total income for that month.



Expenses

Once you fill out all of your income, then you want to fill out all of your expenses. There's a lot of expenses that many people don't think about. And this is why budgeting is so important because all of a sudden, you realize the payment on your credit card bill that you've absolutely no idea what it is and it turns out to be that ancestry.com thing that you signed up for 4 years age, that you have been paying in many time because you haven't look at your credit card statement. Because you haven't analyzed all of your expenses, so take some time and understand where all of this money's going.


  • I find this interesting because a lot of people will not do this and the reason for it is because they are afraid to run a budget because they know how much they owe. They know they have a lot of credit card debt, $2,000 in student loans, a $20,000 car payment, and they don't want to look at it.

But this is one of the best things you can do to confront reality, to confront the problem that you have, maybe you are in debt, confront it and then track it. if you do this on a monthly basis you can start to see that progress. Or maybe you're getting worse, but trust me, if you're getting worse, you're either going to do one of these two things.

  1. You're going to fix that problem and start increasing your wealth. 
  2. You're going to stop using the budget and just totally not think about it. 

But hopefully, it's the first one, not the second one.



Hopefully, you find some value in this article.

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