You know you are supposed to put a budget together, right? Have you lined up this upcoming year in numbers and dollars? Budgeting is terrific because it gives you something to shoot for ... for income and expenses. The problem is that once you put a budget together, you may want to treat it like tablets brought down from the mountain. Remember that your budget is just a guess. A hope. Fingers crossed.
So, lighten up about this budgeting thing. Set your income and expense goals. You can't do it 100% right, meaning you will never guess exactly what is going to happen. Just include the numbers for the expenses you think will happen, as well as the income you want to incur.
Income > expenses. Easy peasy.
Then, use your budget to make some good things happen in your life. Record income and expenses as they happen. The goal is to end each month with money left over. On a weekly basis, take a look at where you are ... actual to budgeted. (An up-to-the-minute review of your financial position can be obsessive. Watch yourself.) If you are "upside down" - spending more than you bringing in - it's time to play either offense or defense.
Play defense. Spend less. See if you can go a whole day without spending any money. Instead of buying paper towels, take a couple extra from the supermarket restroom. Pick one or two expenses that will have to wait until next month. Don't threaten your credit ranking here ... just be creative. The idea is to spend consciously, not torture yourself.
Play offense. Make more. It's exhausting to continually tighten the belt. Figure out how to increase your income. Sell stuff on eBay or Craigslist. Roll coins. Pitch a project at work and present to your boss, including a bonus for you for successful completion.
No surprises here. You know that if you want to lose weight, you have to burn more calories than you eat. If you want to make money, you have to spend less than you make.
photo credit: kenteegardin
Here are a few more tips:
- Siphon and invest. Put payments and investments on autopilot. Classic advice, most famously shared in The Automatic Millionaire by David Bach.
- Treat yourself with the windfall. You might have items on your budget that you just kick in when you have a great month. Shoes! Toys!
- Buy a lottery ticket. One dollar, once a month? Why not? Put a budget together for what you would do with a big win.
Have fun with budgeting. Use your budget to set goals and expand your wealth. Be willing to play offense and defense. And take a few risks!