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  • Rachel Paul

Get Success Out of Budgeting


Do you know that everyone has a budget? You might not want one, or even think you have one, but you do. The money that comes to you, and the money that you spend is called your cash flow- and that, my friends, IS your budget. Your budget is what helps you get what you want out of life.


Perhaps what you want in life is to get ahead by saving for education, a family vacation, or retirement. Perhaps you want to get out of debt. It could be that your focus right now is just getting by until that next paycheck comes.





Whether it is something you need or something you want, creating your budget can help you know your cash flow so you can get to where you want to go, whatever the financial goal may be.


Once you know where you want to go, the steps to get there are as follows:


1. KNOW YOUR INCOME : Where does your spending money come from? For most people this would be their take home pay from their employment. Income can come in other ways as well, so know what source it comes from and how frequently you receive it.


2. DETERMINE YOUR FIXED EXPENSES : These are your expenses that have a set amount to them and wouldn't change much over the year. Fixed expenses could be your rent or mortgage payment, loan payments for your car or student loans, and insurance payments. Fixed expenses are harder to change later, so you want to make sure you don't exceed your spending income with fixed expenses.


3. DETERMINE YOUR VARIABLE EXPENSES: These are your expenses that change by how much you use them. Variable expenses could be your cell phone bill, utility bills, and what you spend on groceries, clothing, and entertainment. These expenses are more enjoyable to spend your money on. Well, maybe you beg to differ about the utility bills...but utilities usually bring you comfort in your living space, and everyone loves to be comfortable. With these expenses, you can have more control to change them if needed.


4. PRIORITIZE : Decisions, decisions, decisions. This is the part that is most important in creating your budget. When you determine what is really important to you, and where it is you want to get to, then you can take a look at your expenses and see how they fit into your financial goals. You may find it's worth it to sacrifice some of your variable expenses in order to get where you want to go.


5. TRACK SPENDING AND REVIEW FREQUENTLY : Find a method that works for you to keep track of spending. The easier it is for you, the more successful you will be. So if an online app on your phone will keep your budget and financial goals at the forefront of your mind, then this might be the best option for you. Creating a budget that you forget about doesn't do you any good, so reviewing it often will help you know if you need to make any changes to it. A budget isn't set in stone, so put the "budge" into your budget if priorities change, and make it work for you.



Why do you hear people talking about budgeting all the time? Well, because budgets work! So when you get to the end of this post, take the opportunity to create a budget so you can get going on your road to success.