The mechanics of budget creation are fairly simple: track how much money is coming in and how much is going out by making an inventory of income and expenses.
Even if you’re not a number’s person and prefer a big picture view of your finances rather than fuss with details, you can use a budget spreadsheet or software to organize your budget. In the worst-case scenario, you can even ask someone to do it for you.
The Budgeting Challenge
If budgeting is easy to do and can help you organize your finances, then why don’t most people do it?
It’s for psychological reasons. We don’t want to look at our own spending habits.
Money disappears from your life when you pick up bagels at the grocery store, when you buy a sandwich for lunch at the corner deli, and when you gas up the car to go to the movie house, where you might buy some buttered popcorn and soda.
What’s more, when you think about it, the money that flies out of your pocket in a matter of minutes may have taken you an hour or more to make.
Unfortunately, when you make a budget, you need to know the truth; and although, it will set you free from the urge to overspend on silly things, it’s still painful to face up to our mistakes. In short, when you think about how difficult it is to make money and how easy it is to spend it just to get through the day, it’s discouraging and depressing.
The way to overcome procrastination when it comes to making a budget is to ask a question:
What would you do if you were an efficient saver?
A whole new world of possibilities would open up for you. You would be able to contribute to your 401 (k), your accumulating savings would benefit from the multiplying effects of compound interest, and you would be able to invest a part of what you earn to buy shares and earn stock dividends.
Start with Life Insurance
You can think of life insurance as a way of budgeting for your family’s future. Think of the premiums you pay as the equivalent of putting money away every month into a savings account.
Getting life insurance is making financial plans for your children and grandchildren. When it comes to selecting a provider, one life insurance company that you may want to consider is Transamerica.
Transamerica Life Insurance company has built its reputation over more than a century. Amadeo Giannini started the company in 1904 and it began to flourish two years later when he offered loans to the residents of the San Francisco after the huge earthquake on the guarantee of a handshake. PolicyZip offers an in-depth review on the company’s insurance plans.
What to Do with Extra Money
You don’t always have to earn every dollar that you put into your bank account.
Sometimes you just receive free money; that is, money that did not require your labor. It can come in all sorts of ways—a small lottery payout, a tax refund, a salary bonus, a financial bequest given by will, a gift from a generous friend or relative.
Unfortunately, since the money did not cost you time nor energy, you might celebrate with a new designer jacket, a night out on the town, or even a vacation.
Extra income should not be treated like found money. Treat this money as if you had spent years saving. Increase your contribution to your retirement fund. Buy a stock. Start an online business. Use the money to make more money.
In conclusion, think of budgeting as a powerful tool to launch great future for yourself and your family.