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How to Create a Budget
Budgeting Your Dollars in 2017
Normally, budgeting ideas for the new year come in January. However, I thought mid August might be a good time to revisit this as well since back to school fever is in full swing. What changes will you make this school year to stay in the black each month? Will you be intent on saving more in the coming months due to the great recession of 2008-2009? There are a variety of methods to manage your money, and certain strategies benefit different people. While there are numerous software packages and budget plans available to budget your money, it is mandatory that objective goals are established and a firm budget is put in place and stuck with.
I am going to tell you a little bit about my past budget experiences before I explain some new budgeting ideas. I opened my first checking account when I was 16 with Bank of America, and I immediately received the glorious piece of plastic- my debit card! I knew that the card only paid for what was in my checking account, but at the same time, my checking account was linked to my savings account so I felt like I had a lot. I don't know what it is about plastic cards, but it never feels like you are spending real money when you use them. Well, I spent and spent and spent, and I continually transferred more and more money from my savings over into my checking to maintain an adequate balance in my checking. My savings began to dwindle until I finally decided to do something. I now rarely use my debit card for any purchases, and I always keep cash and coins on hand to pay for small purchases. I started a program through the online banking system at Bank of America called My Portfolio. This organizer draws charts and graphs of all the income and spending I have done each day. Also, it catergorizes purchases and shows exactly how much is spent each month in different catergories like groceries, travel, or shopping. Ultimately, the My Portfolio at Bank of America has allowed my to remain conscious of my spending, and I strive to seek the goal of earning positive cash flow each week.
My Budget Idea
Recently, many individuals have brought forth plans for proper budgeting with some ideas being quite outrageous and others very reasonable. I particularly like Dave Ramsey's "envelope budget." This method calls for you to label envelopes in different categories like haircuts or eat out, and then place the budgeted cash amount in each envelope. After each purchase in a category, it is important to write how much was taken out of the envelope so everything is accounted for. The method is quite simple because once the cash is gone, your spending is done for that category. Most people do the envelope budget on a monthly basis. The key part about this whole plan is knowing the appropriate amount to budget in each category. A budget is called a budget for a reason. You're not supposed to have plenty of extra money when the month is over. You can find more information on this budget plan at www.daveramsey.com. Overall, I hope this budget plan benefits you in the new year, and please leave me comments concerning the budget plan you currently use.
One method I use to reward myself for cutting or reducing costs in my monthly budget is to continue to withdraw the cost savings and place it into a special savings account. Then at the end of the year you can see how much savings accumulated from cutting expenses in different areas of your budget. For example, I recently found a cheaper quote on my car insurance that reduced my monthly expense by $50. I now have that $50 automatically placed into a savings account each month. It gives you visual and ensures you do not spend more on some other budget category now that you have those extra savings.
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