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08.14.2020 / Budgeting « Back to all articles

10 Commandments of Budgeting
10 Commandments of Budgeting

The best budget is the one you'll stick to. Remember that, and don't get too bogged down, deciding which app, software, or unique stationery to use. Just dive in headfirst and make adjustments as you go. No matter what method you choose, there are a few foundational principles that will help you find your way. 

1. Give Every Dollar a Job 

First, don't budget money you don't have. Second, do budget all the money you have. This doesn't mean that you immediately spend every dollar you earn. Instead, it means that you should allocate every dollar to a specific category, even if that category is savings. 

2. Decide What Is Most Important to You 

You only have a certain amount of money at any given time, and if you don't put it toward the things that are most important to you, your budget won't do you much good. When deciding how to fund each budget category, start with essentials such as housing, groceries, utilities, and transportation. 

3. Plan For the Unknown 

When you're building your emergency fund, keep in mind that this fund is only for true emergencies, such as a broken water heater or an unexpected automobile repair. Some personal finance experts suggest having three to six months' living expenses tucked away for emergencies. Set aside a little each month until you reach your goal. 

4. Plan For the Known 

Not every unanticipated expense is an emergency. If you have recurring payments that are not due monthly, such as costs associated with travel, those are not emergencies. Plan for irregular expenses by setting aside a little each month so that you have the money when the time comes.   

5. Spend Less Than You Earn 

Spending less than you earn requires self-discipline and a definite sense of your priorities, as mentioned above. It also keeps you from getting weighed down with more debt than you can handle. 

6. Balance Your Books 

Although you may not carry a cheque book that you must balance at the end of each day, you should still set aside time each week to make sure you have accounted for all of your spending and that your bank balance matches up with the running total in your budget. 

7. Continuously Reassess 

As your life changes, so will your income, your priorities, and, of course, your budget. At least once per year, review your budget categories and decide what changes you need to make. 

8. Make Technology Work for You 

Many budgeting apps do most of the work for you once you have entered your categories and goals. Some apps even link with your bank to automatically import transactions. If you're a spreadsheet person, set up formulas to do the adding, subtracting, averaging, and graphing for you. Don't make budgeting harder than it needs to be. 

9. Jump on the Bandwagon 

Budgeting is all the rage these days. Find some like minded people and go over your budgeting systems. It will help keep you accountable. 

10. Celebrate Your Successes 

After you have budgeted for a while and applied all the rules listed above, you will start to notice a difference in the way you think about money. You should also see a little more breathing room in your bank account. Celebrate small successes as well as significant milestones. You've worked hard for this. 

11.24.2020 / Borrowing

Falling Behind on Your Mortgage? Read This
When economic times are tough, it's easy to start falling behind on crucial monthly payments, including your mortgage.…

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Loan?

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08.14.2020 / Budgeting « Back to all articles

10 Commandments of Budgeting
10 Commandments of Budgeting

The best budget is the one you'll stick to. Remember that, and don't get too bogged down, deciding which app, software, or unique stationery to use. Just dive in headfirst and make adjustments as you go. No matter what method you choose, there are a few foundational principles that will help you find your way. 

1. Give Every Dollar a Job 

First, don't budget money you don't have. Second, do budget all the money you have. This doesn't mean that you immediately spend every dollar you earn. Instead, it means that you should allocate every dollar to a specific category, even if that category is savings. 

2. Decide What Is Most Important to You 

You only have a certain amount of money at any given time, and if you don't put it toward the things that are most important to you, your budget won't do you much good. When deciding how to fund each budget category, start with essentials such as housing, groceries, utilities, and transportation. 

3. Plan For the Unknown 

When you're building your emergency fund, keep in mind that this fund is only for true emergencies, such as a broken water heater or an unexpected automobile repair. Some personal finance experts suggest having three to six months' living expenses tucked away for emergencies. Set aside a little each month until you reach your goal. 

4. Plan For the Known 

Not every unanticipated expense is an emergency. If you have recurring payments that are not due monthly, such as costs associated with travel, those are not emergencies. Plan for irregular expenses by setting aside a little each month so that you have the money when the time comes.   

5. Spend Less Than You Earn 

Spending less than you earn requires self-discipline and a definite sense of your priorities, as mentioned above. It also keeps you from getting weighed down with more debt than you can handle. 

6. Balance Your Books 

Although you may not carry a cheque book that you must balance at the end of each day, you should still set aside time each week to make sure you have accounted for all of your spending and that your bank balance matches up with the running total in your budget. 

7. Continuously Reassess 

As your life changes, so will your income, your priorities, and, of course, your budget. At least once per year, review your budget categories and decide what changes you need to make. 

8. Make Technology Work for You 

Many budgeting apps do most of the work for you once you have entered your categories and goals. Some apps even link with your bank to automatically import transactions. If you're a spreadsheet person, set up formulas to do the adding, subtracting, averaging, and graphing for you. Don't make budgeting harder than it needs to be. 

9. Jump on the Bandwagon 

Budgeting is all the rage these days. Find some like minded people and go over your budgeting systems. It will help keep you accountable. 

10. Celebrate Your Successes 

After you have budgeted for a while and applied all the rules listed above, you will start to notice a difference in the way you think about money. You should also see a little more breathing room in your bank account. Celebrate small successes as well as significant milestones. You've worked hard for this. 

Need a
Loan?

Loans from $120 to $15,000. Get funded as soon as today!

11.24.2020 / Borrowing

Falling Behind on Your Mortgage? Read This
When economic times are tough, it's easy to start falling behind on crucial monthly payments, including your mortgage.…