Financial Therapy: Budgeting For Beginners
Budgeting for beginners can seem like a daunting task. However, with a little bit of advice, you
can get started on your budget today and be well on your way to a more secure financial future.
Establishing a budget is not a bad place to start, but as with many financial "advice"
articles, it doesn't go into how to create a good budget. As a result,
many people end up trying to do something that's not working.
Hello there and welcome back to Mindful Psychology. Today,
we will be highlighting the steps and tips on budgeting for beginners on today's show. Make
sure to stick around to find out all you need to know about the abundance mindset. Also,
hit the subscribe button and notification bell for more videos like this if you haven't already.
Step One: Embrace the Ongoing Process of Budgeting. The first step in budgeting
for beginners is to embrace the fact that this is all there is to budgeting. It's not something you
do just once, then check off your list and forget about it until next month. Budgeting is an ongoing
process that, if you're doing it right, will never stop. Though it might feel like a chore at times,
the ongoing nature of this process is one of its biggest advantages.
If you're making changes to your spending habits and keeping track of your finances regularly,
you're far less likely to be blindsided by a financial emergency or unexpected expense. 9.
Step two: Calculate Your Monthly Income Calculating can be an important step towards
financial stability. To begin budgeting, you need to figure out your expenses and income.
To see how you will perform financially, it is necessary to calculate your monthly income.
An income statement will help you do that. In this document, list the sources of your income, such
as your wages or salary, child support payments, social security benefits, and dividends (if any).
The next step is to calculate the total amount of expenses you have each month. This includes rent
or mortgage payments, utilities, and cable bills. If you have loans or credit card debt,
include that as well. After adding all your monthly expenses together,
subtract this total from the total amount of your monthly income. This is the amount of
money you have leftover at the end of each month to use for paying down debt or creating savings.
Step three: Add Up Your Necessary Expenses The first step in financial therapy is to add
up your necessary expenses. If you are living with others, including their expenses as well.
This may sound harsh but you need to get real about what you need per month to be happy and
survive. Most people can get by with less than they think. If you have the internet
or a library nearby, you can use the standard budgeting worksheets to calculate this number.
Include fuel for your car even if it is paid for separately.
You may also want to include health insurance payments if you don't have coverage through work.
Do you need a monthly bill organizer will replace your checkbook organizer or bill organizer once
you start using it? Clever Fox Budget Planner is a great way to keep track of your money and stay on
top of your bills. This budget planner and expense tracker notebook come with a handy storage pouch
that's perfect for holding pens, your phone, and other small items, or you can use it as
an envelope to hold all of your check stubs and receipts. You can also use the clever coin pocket
as a 'receipt holder' while shopping. Kindly check the link in the description below for more info.
Step four: Add "Pay Yourself" Line Items There is another important step.
How? Add some "pay yourself" line items instead of automatic payments. When you pay yourself,
be sure that the amount is realistic and not so big that it will throw off
the rest of your budget. Remember that you can't spend what you don't have;
give yourself time to build up a cushion of savings or investments in addition to your
monthly expenses. Paying yourself first is a great way to ensure that your savings goals are met.
It also forces you to be disciplined, and it prevents you from spending the money on
something else. You can do this with a line item in your budget or use an envelope system. The key
is to make saving automatic and not payments so you don't even have to think about it.
Step five: Plan for Your Desirable Expenses This one is quite straightforward. Most
people don't plan for expenses they love. It is about releasing your money in a disciplined way.
You need to plan for your discretionary. Your spending habits are very essential to manage
your finances. You need to be aware of how you wish to spend on your favorite things.
Step six: Compare and Adjust
The thing to remember is that if you can't make ends meet, the problem is not with your
budget - it's with your income. The next step in moving forward is to make a realistic assessment
of what you're bringing in and what you're spending or rather, what you're throwing away.
This exercise will help you do that, and it will also help you set up a budget for the future.
You'll use the information to decide how much money you have coming in each month, which will
give you a baseline from which to increase your monthly income or decrease your monthly expenses.
Step seven: Track Your Spending A good way of getting your finances under control
is to track your spending for a few weeks. This is easy with a credit card, harder with cash and
checks, but still worth doing. How much are you spending on food? How much on insurance? What
percent of your income do you save? Here are some tips:
Don't start by trying to track every last penny. Pick one or two categories
(groceries, restaurants, etc.) where you think there might be room for improvement and track
those instead of everything. Once you get the hang of it, go ahead and add more categories.
Keep your receipts so you can make sure not to double count things like
gas or coffee from your commute. Put all your receipts in a folder once a week.
At the end of the month label them by category (gas, groceries) and add up their totals.
If there's a receipt for something that's not a transaction (a deposit slip or a check),
write down the date and total on a piece of paper instead of using a receipt.
Go through every expense at the end of the month and put them in categories like
"business" or "entertainment" if they're business expenses or personal ones
Step eight: Save up for big purchases You can't buy a car, or a house,
or anything else expensive, if you don't have any money. But most people
don't have enough money. How do they get it? First, you save up. If you have a little bit
of money right now, hang on to it. If you're like most people, you probably have a lot more money
than you realize -- just not in your bank account. You have some money in your checking account and
some in your pocket and some in your wallet. And you probably also have some at home and maybe
even some in a safe deposit box at the bank. The total amount of all that is more than $0,
but less than $50 or $100 or $1 million. Your goal is to get all that money together
into one place -- your savings account -- where it will grow
until you need it for something big like a house. Step nine: Make sure you're paying the best prices
Before you can make your budget, you need to know what the prices are.
Lots of people think they know what something costs, but they're often wrong. For example,
how much does a car cost? What's the price of a house? How much should you pay for a haircut?
There are a lot of things that can surprise you when it comes to prices.
You need the information when it comes to understanding the cost of everyday items.
Final step: Live the Plan Establishing a budget can be a
great first step toward getting your finances in order, but if you don't build on that foundation
and make some serious lifestyle changes, you might find yourself right back where you started.
The best way to approach a budget is to think about it as an ongoing financial
plan for your life, rather than something you do each month or year. Think about the
big picture of your financial goals and what sacrifices need to be made to achieve them.
A budget is therefore more than just a series of numbers -- it's a plan that helps
you live the life you want with money in the bank. Sticking to the plan will help you prioritize your
spending so that the essentials of your life are covered first. Live your life as you planned it.
With that, we have come to the end of today's therapy. Do we hope you enjoyed it?
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