Budget basics: How to set up a sensible budget

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by iiivix

Created on: October 03, 2008

"A penny saved is a penny earned." When setting up a strong financial system every cent counts. Whether your income is six figures or chin up over the poverty line, personal wealth only comes with a well planed budget. Before we jump in consider your income goals.

Start your budget by writing down those goals, and how soon you expect to achieve them. Now put them in order of inportance and cross out the last half. Too many goals will only make your life more difficult. Remember that simplicity is key to budgeting. A personal budget should be seen religiously as your life literally depends on it.

Achieving your financial goals will only come if you work for them.

1.) Keep it simple. Spend less then you make. Credit is poisonous, and savings are sacred. Credit cards and anything else with an interest rate destroy income, worse then inflation. Pay them off and get rid of them, they only serve to support impulsive buying. Your savings are not your credit either, never use it to buy anything you immediately need. They are for future goals and emergencies, only.

2.) Pinch every penny. Work your budget into your daily life, and estimate how much money you need every day. Before you start your day put at least 10% of your daily allowance in a jar. You can only force yourself to spend less if you have less. Work your allowance down on a weekly basis and keep saving.

3.) Be unsatisfied. Never buy something to make life easier, a cluttered life is not easy. Satisfaction can lead to extravagance. You may want more tv, more internet, more car/house, more everything, but it won't bring you the fulfillment you desire. Having less in your life means more simplicity and savings.

A budget is only as strong as the person behind it, and with these three rules you can achieve any reasonable financial goal.

Additional Financial saving tips.

1.> Merge errands to save gas

2.> Don't use things to make work easy if they cost more.

3.> Buy as few groceries as possible to save on waste

4.> Avoid resturaunts and fast food

5.> Excercise to keep away from future medical bills

6.> Don't buy in bulk unless you can use it before it expires

7.> Boredom is money

8.> Put your savings in an IRA to lower your taxes.

9.> Sell your car for a junker and use it 'til it dies, then get another one.

10.> Buy gold if your income can't keep up with inflation.