The ultimate budget guide

A budget is a plan. That's all it is, and a plan is a detailed proposal for doing or achieving something. The word budget often gets a bum rap, people worry thinking it'll be like putting a straitjacket on their spending. But budgeting doesn't tell you not to spend, instead gives you the power to spend the right way towards your goal.

Some years back when I first come to myself about where I was financially. And began looking for help, some friends of mine redirected to Dave Ramsey website were I understand more about Budgeting. And the very thing I understand was that budgeting is a plan, and not long I also come across a book by brian Tracy "goals"

Then I understand that what dump me inside of the dishes I was financially was my lack of plans. Maybe your goals was to retire early, or to lunch your own private enterprise or to pay off all bad debt. What so ever your goal is, as far you need money to achieve it. You need this powerful force called budgeting. To channel your finances in there direction. When you turn in to the habit of Budgeting every amount, you're giving your money a purpose, and you're talking control of your money.

BUDGETING myths that has been drawing many away.

Like we said, budget is a plan for your income and expenses. When you budget, you see what you make and what you spend. And if you find out you're spending more than you make, you can adjust so you stop overspending.

But over the years I've probably heard plenty of excuses on why you can't or shouldn't budget. And for you to see if there is any truth behinds this myths let see.

1. BUDGETING IS BORING: you'd be amazed at how many people don't make a budget every month because they think it's boring. You know else is boring, credit calls, statements and calculator calls, and bankuptcy court....acctually, all of that is pretty awful.
2. Budgeters don't have fun or buy nice things: let's go ahead and stamp a giant false on that one. listen, Budgeting doesn't mean you never spend money, it means you plan for how you spend money so you do it like a responsible adult. So, you BUDGET for fun, and you always BUDGET for the things you need before all the things you want.
3. BUDGETING takes much time: first of all, you can't afford not to spend time Budgeting your future financial success depends on it! If you're not doing a budget because you don't think you have time, consider taking a flesh look at your priorities, you might be surprised at how many "things" you could let go of in order to get your finances back in shape. you Know, as important as taking control of your money.
4. Budgeters have to be good at math's: if you don't top the charts with your act math scores, that's no excuse to skip Budgeting. Everyone needs to BUDGET-no matter their school subjects strength or weaknesses. Also, we have good news. Maths is not rocket science. If you can do basic third-grade math, you can make a budget, your income minus your outgo needs equal to zero.
   
5. Not everyone needs a BUDGET: seriously-everyone needs a budget. Because a budget helps you get ahead of your money, take control of your money, if you want to crush your goals quicker, if you're in debt up to your eyeballs or feeling pretty good about your finances you need a budget. It doesn't matter if you have hundred dollar to your name or you're a millionaire you need to tell your money were it goes.

Which Budgeting method should I use?

We have a proven method: it is call "ZERO-BASED-BUDGETING" and don't beat around the bush about the fact that it's the best way for you to take control of every. Single dollar you made, but we want to look at a couple other popular methods too, so we can compare and contrast-and show why ZERO-BASED-BUDGETING wins Everytime.

50/30/20 Rule

One popular budget plan is called the 50/30/20 rule this method sets all monthly spending and savings into three categories:

• Needs (50)
• Wants(30)
• Savings(20)

At first, this methods seems great because it uses Budgeting percentage which are ussually helpful, but the biggest problem with the 50/30/20 rules is that it leaves only 20% for savings, retirement and extra debts payments. Minimun payments on debts are considered a need, but if you want to pay anything above that, it'll have to come out of the last 20% that was set aside for savings.

That kind of thinking makes for everyslow progress toward your money goals, Because if you're in debt, you'll want to throw more than 20% of your income at those payments to crush debt for good. After that, you can move on to saving and investing.

60% solution

This method says to put 60% of your income toward committed expenses-aka the things you need and any non-essentials you've committed to. The rest of your income is divided up into four categories: 10% to retirement, 10% to short-term savings for emergencies or large upcoming needs like a new car, and 10% for fun.

While we applaud the emphasis here on savings, were not into lumping needs in which the things you've "committed to," you can commit to a lot of expenses that you really don't need, like an expensive phone plan or too many streaming services.

Reverse Budgeting method.

Well named, this method starts with savings and then tackles spendings. It suggests beginning your budget by setting aside money to save and invest after that, you Budget for essential expenses like housing, utilities, transportation, food, insurance and debt. Financially, you cover non-essentials and fun.

This method is anti-debt, which we're all about. But taking down the debt before you load up the savings and start investing for retirement. Your income is your latest wealth-building tool. And being debt-free means using that tool, to its fullest potential, rather than losing it to interest payments.

ZERO-BASED-BUDGET

ZERO-BASED-BUDGETING is a way of Budgeting where your income minus your expenses equals zero. You have to make sure your expenses march your income during the month. That way you're giving every dollar that's coming in a job to do.

Now, that doesn't mean you have zero dollars in your bank account it just means your income minus all your expenses equals zero.

Pretty simple right? Basically, it's just a plan for your money.

Let's say you earn $3,000 a month. Everything you spend, save, give should add up to $3,000 that way you know exactly where everyone of your hard-earned dollar is going. You could be setting yourself up for disaster if you don't know where your money is going each month. It's no fun to look up one day and find out you have no money- and no clue-where it all went!

What's goes into your budget

All your source of income (that means your regular paychecks plus any side income) and all your expenses (that means) your essential (and your extras) need to show up in your budget.

If money is coming in or going out it needs to be in the budget.

How to make a zero base BUDGET.

BUDGETING might seem intimidating at first, and it honestly does take time to get used to it (usually three months) but-onced you get the hang of it, the benefits far outweigh the possible struggle at the start. Because you're about to look your money in the eyes (not literally, of course) and say, "hey. I work hard for you. Now it's your turn to work hard for me"

1. Write down your monthly income: you can do this the old-fashioned way with a sheet of paper, excel spreadsheet, or you can use free Budgeting app, (which you can get a bunch of it at Google play) and we say income, that should include paycheck's, small-business income, side hustles, residual income, child support, and any other cash you bring in. If it's money and it comes into your households bank account, it's income! Be sure to write it down and it all up in your budget.
2. Write down your monthly expenses: before the new month begins write every expense, things like rent, food, cable, phones, and everything in between should be added to the list. But be sure to your budget with the four walks first- that's food, utilities, shelter and transportation.
3. Substract your income from your expenses to equal zero: alright, we want this number to be Zero, but it might take some practice to get there, Don't be shocked or worried of your income and expenses don't balance each other out right away, that just means you need to do something to bring one of the numbers up, the others down, or both! Yeah. It's going to take up if things don't line up right away. Most of the time, it takes people a good three months or so to really get the hang of it. Keep working at it until you get to a big. Whooping zero.
4. Track your seasonal expenses: now think through the whole calendar year- what expenses will you have coming up that you can start planning and saving for now? Things like birthdays, anniversaries and holidays are set dates that should not surprise you- or your budget so whatever the known expenses, make sure you prepare for it in the budget. You know Christmas is in December every year, so there's no reason to act like it suddenly snuck up on you. If you know you want to spend $600 on Christmas, then divide that by how many months are left and boom- that's how much you should make sure to save each month.

How to BUDGET irregular income.

So, maybe you don't make the same amount of money every paycheck. If that's you, you aren't alone. Plenty of people work hourly or commission-based jobs, or have side gigs that charge up their income every months. In the Budgeting word, we call that irregular income, and it's plenty common.

But you can- and should-budget every month, irregular income or not, it takes a little getting used to. But make sure you cover the four walls-first (just like a regular income) and then list out the rest of your expenses in order of importance, when you do get paid, take that amount and spread it out over items in your budget. If your paycheck doesn't cover everything listed on the budget, that's okay! Just take care of the things you marked as most important if you get another check pick up where the lost check left off if you end up with extra money after all expenses have been paid, that's when you look at saving more, spending more, or paying on debts.

You need some fun Money on your budget.

First of all, Putting fun Money in your budget isn't a green light to drop your money goals or go on a spending free-for-all. Fun Money isn't an excuse to be wasteful- it's another way to stick to your budget. Remember, you want a ZERO-BASED-BUDGET so you can give every single dollar a job. And a fun Money makes you focus all your spending-even the fun stufff- so you don't accidentally waste money on little things here and there.

When you give yourself a budget line for fun, you can spend that amount on whatever you want, this is the money you've set aside to spend on the fancy cappuccino or the new shoes you don't need but really want, also if you're married,make sure you and your spouse each have your own fun lines.

BUDGETING what you enjoy.

No two budgets are exactly alike because no two people are exactly alike, you also get to decide who or what gets your money each month. If you love cooking for your family, budget more for groceries, if you love working out, budget more for a great gyms, you are the boss of your own budget.

But what if you start to notice that you're overspending on those gourmet groceries or kickboxing classes? All of a sudden, you're paying more for those than your monthly rent or mortgage;

So how do you strike the balance between Budgeting for what you love and Budgeting for your goals.

1. Groceries: those truffle oil and those imported sauces aren't cheap. Instead of wowing your family with five-star meals every single night, make that your Saturday night specialty that way. You don't have to fully give up your love for preparing exotic dishes and your family can look to that special meal once a week.
2. Travels, traveling during the off season is a great way to get the experience you want on a budget that you can handle. Look online for travel deals that entice people to travel during off-peak times of the year. Of course, you'll want to do more than sitting in your cabins or hotel room during the trip, do before you take off, research great local restaurants that are off the beaten paths and don't inflate their prices for tourists.
3. Clothes: you can't get enough new clothes, shoes and accessories to satisfy your passion, great looking clothes make you feel great. But there are plenty of ways to stop for clothes that won't ruin your budget. Go consignment shopping, especially for kids clothes! They grow so fast, and it's tough to justify pay full price they will only wear once or twice. Plus when those clothes don't fit anymore you can sell them right back to the consignment shop- which gives you money to spend on other clothes.
4. Gyms: instead of paying the price tag of an elite workout, why not replace a few of those expensive gym sessions with workouts you can stream at home. You can fin plenty of workout on YouTube (for free) that will get your heart rate up, you'll still get a great workout and you definitely won't get bored. And if you start to feel like you miss the community that you had at the gym, start a running club or an exercise group in your neighborhood. Bonus: you'll be exercising with friends and built-in accountability partners.
5. Entertainment: a night at the movies can bit your wallet pretty hard, especially if you're paying for an $8 bucket of popi, a $10 soda and a babysitter. Pick one or two movies per-month, and wait for the rest to hit Redbox or your favourite streaming service, then put the kids to bed, pop in some frige-to-oven cookies, microwave some popcorn, and enjoy!