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Starting from Scratch: Learn the Basics of Personal and Family Budgeting

By Debt.ca on June 4, 2013 No Comments

The word “budget” can make even the most easygoing person cringe. But budgeting doesn’t have to be scary! A budget is the first step toward taking control of your finances, and it is the foundation of a good financial plan. If you’re just starting to budget, it can be a little overwhelming, so take it easy and start with the basics.

What Is a Budget?

Basically, a budget is a plan that lays out how much income you’ll receive and how your money will be spent in a set period of time. If you know how much money is coming in, it makes it a lot easier to determine how much money you can spend on various aspects of life. A budget can be laid out for any time period, but it’s often useful to create weekly, monthly and yearly plans in order to get the best handle on your financial situation.

Budget for What’s Necessary First

There are certain expenditures that are necessary and set, and those are the things you should budget for first. Mortgage payments, car payments, insurance, energy costs–these are all set costs that you’ll need to put aside at certain times of the month. Once you get those set costs out of the way, you’ll know how much more income you have to work with.

Go Into a Budget With the Right Attitude

One of the worst things to do when it comes to budgeting is to go into it thinking that it’s hopeless, or that it will result in you being unhappy. If you do it right, a budget will actually allow you to have more fun, because you’ll be more comfortable with your financial situation, which can be a huge stress relief. Don’t be too hard on yourself either. Sure, debt can be daunting and it’s important to pay it off, but allow a little space in each budget for family fun. Nobody can be perfect all the time, and while it’s great to find new ways to spend time together that are free, it’s also important to have a little wiggle room and treat yourself every once in a while. Your spending habits will be a lot easier to control if you just sit down and look at where you can make some changes.

Keep Track of Your Results

One of the best ways to stay motivated and keep yourself from overspending is to keep an eye on how you’re doing, and how the budget is making a difference in your financial situation. You should set aside a few minutes each day to look over your spending and see how it’s working within your budget. Keep track of your debt and recognize how much more money you’re able to pay off as you find new ways to save money.

If you’ve been avoiding creating a budget, it’s time to take the initiative. The basics of budgeting are pretty simple, and a budget is also one of the best ways to relieve financial stress and get back on the right track. It’s never too late to start budgeting!

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