Business owners’ don’t operate without a budget in place, so why should you?
Unfortunately it is common to see families without a budget in place and consequently, common to see families not reaching their full financial potential.
A personal budget helps you and your family streamline towards your financial goals and stay on the right ‘spending track’.
In terms of finances, a family operates quite similarly to a business. There is income generated, expenses, and hopefully money left over for investment in property, other investments or simply enjoyment. So why is it that families and individuals don’t take advantages of a budget’s benefits? Well for many people, budgeting can seem overwhelming, too complex or too time consuming to commit to.
That is why we have listed below the important reasoning behind personal budgeting and the ‘how’ aspects to guide you through the process :
Most of your income has already been nominated to keep the electricity on, pay the mortgage and other household bills long before you are even paid. Budgeting can be seen as just honouring these commitments you already have, while monitoring what is left after these obligatory expenses for every-day living.
Not all of your day-to-day living money is in one place. You could have some in your wallet, the bank or with your family and children. This makes your day-today expenses hard to keep track of and therefore hard to control.
A budget ensures that you track your every-day living expenses such as fuel and grocery’s by keeping you aware of your spending. To track your spending you need a simple system to ensure you commit to it! There are many apps available such as Pocketbook or Pocketsmith that enable you to record your spending from the convenience of your mobile, and also automate a lot of the data entry for you. You don’t need to be too scrupulous by tracking each individual cent. Just record your main daily expenses, and allow for minor additions.
The number one reason that people give up on their budget is because they don’t have the right attitude. You are more likely to commit to your budget if you approach it in a positive manor. You should think of your budget as a measure to achieving your financial dreams instead of a restricting sacrifice. It’s all in the attitude.
At the end of the day, money is the tool that helps you reach your goals in life whatever they may be. So it is incredibly important you know where your money is going, and so you can make conscious decisions about how to use this tool most effectively.
A budget shows you exactly where your money is going and allows you to save for the things you want most; whether that be a house, a holiday or whatever your saving goals may be. With the right attitude, commitment and a budget, you can achieve these goals.
There some concepts of budgeting that will flow throughout every successful budget, no matter the situation. It is important to remember that a ‘generic’ or ‘one-size-fits-all’ budget will not give you your desired outcomes. You need a simple, and easy to abide by budget that is tailored to you or your family’s needs in order to succeed. The rewards should keep you going.
For effective personal budgeting you need to:
To continue this discussion and come up with the most effective budget for your personal situation, please contact our office today to get you on track to reaching your financial goals.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
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The information provided on this website is for general guidance only and is no substitute for professional advice. It should not be used as a substitute for legal, business, accounting, tax, financial planning or other professional advice.