Wealth and Money

5 Basic Budgeting Steps

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5 Basic Budgeting Steps
Frugality includes all the other virtues.
 -Cicero

Basic budgeting isn't as hard as you think. Still it is a challenge for many. I know because I'm surrounded with people struggling to make ends meet. I too, have had my fair share of financial struggles. Had I discovered the 5 basic budget steps earlier, I wouldn't have gone through it.

Growing up, I've never seen my mother do a budget-check. I've never seen her concerned about saving. She's a spender.

When I started working, my colleagues get excited about loans. Loans! And not having the foundation or literacy about financial management, I thought it's a good thing and joined the bandwagon.

Having attended several financial seminars, read financial books and blogs, and being a trying hard Ms. Frugal, I've learned my lessons. Here are 5 simple budgeting steps I'd like to share:


5 Basic Budgeting Steps 


Break down your income into three parts (I've learned this from author Bo Sanchez):

  • 10% - Tithe or give back to the universe.
  • 20% - Invest in your choice of investment. I prefer paper assets and profit sharing because I'm not really business savvy and I don't have time to focus on a physical business.
  • 70% - Spend.
Break down your income


Know the difference between "wants" and "needs".
You need to eat food, but you want ice cream and chips. I'm not saying you should never eat them. You can in moderation. They are extras. You don't NEED them. It's just good to have them once in a while. I know. I'm a dessert person.

You just need a few clothes, you shop like crazy.

"wants" and "needs"


Compare.
When buying something, always research, ask around or check the price of the item or service you need. Compare and see which brand offers the cheaper price but also choose quality.

Remember: you get what you pay for. So if you buy really cheap, you end up buying another because it doesn't last. You actually spend more if you do that.
 
Compare



Make a plan and have a target.
Saying, "I'm going to save my money" is very vague. How much are you planning to save? When is your deadline? How are you going to achieve that financial goal? Plan. Make a system. Stick to it.

Be specific.
 
Make a plan



Be patient.
Nothing worth having comes easy. It's easy to be impatient if you don't see any progress or change right away. Think five, ten, twenty years from now. Remember the power of compound interest.

It is advisable to find your emotional why. Why do you want to save? What is your intention? What is your drive?

Imagine your future self.
Are you going to thank yourself now? Or curse it for being so irresponsible?



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TrulyRichClub Online Wealth Summit

How much is your cup of coffee?
How much did you pay for your smartphone?
How much did you spend on your last shopping?
How much was that movie ticket?

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Truly Rich Club Online Wealth Summit 2018: Money Machines


All gifs from Giphy


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1 comments

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  1. Very informative budgeting ideas.......so needed in this day and age.
    Thank you for sharing with the Clever Chicks Blog Hop! I hope you’ll join us again next week!

    Cheers,
    Kathy Shea Mormino
    The Chicken Chick
    http://www.The-Chicken-Chick.com

    ReplyDelete