Financial Budget

These are definitely uncertain economic times that we are living in. It seems like whenever you turn on the news, there are more job losses on the horizon. Now more than ever it is important to have a financial budget in place.

A financial budget is one of the best ways to track your expenses. You can try the paper and pen method if that is your choice. I prefer to use an electronic method to track my expenses.

A budget is not a difficult thing to follow. The difficulty lies in getting started. Most people don’t like to stick to a budget because it makes them feel restricted in some way. That is the first idea that you need to get out of your head.

A budget is in no way restricting. If anything, it can provide you with the financial freedom that you desire. Think of how many times you receive credit card offers in the mail. Banks are desperate for you to borrow money from them. I am surprised that even in this financial crisis, I am still receiving credit card offers in the mail!

So many of us live by the philosophy of “buy now, pay later.” This is one of the costliest mistakes that a person can make. It is so easy to get into this trap. I used to always make the joke that Mr. Visa was paying for my dinner out or my new clothes. Imagine my shock when I opened that credit card bill!

I started using an envelope system each month to track my purchases. First I cut up my credit cards so that I would not be tempted to use them. Then I took out all the money in my checking account each month and divided it into envelopes. These envelopes were labeled: rent, food, utilities, cell phone, etc.

Following these simple financial budget steps has allowed me to payoff over $20,000 of debt in just under two years!