When someone creates a budget, he or she knows how much money they bring in and what they spend. This allows them to be more mindful when it comes to their funds, which is a practice that the likes of Robert Jain can recommend. Budgeting is a worthwhile practice to carry out, but there are a few ways to ensure that it's done well. For the uninitiated, here are some do's and don'ts that you would be wise to follow.
DO use spreadsheets to make things easier for yourself. According to reputable names such as Bobby Jain, spreadsheets are ideal for keeping track of finances. Not only can they keep your data organized, so that you don't have to sift through multiple pages, but you can pull up said spreadsheets from anywhere. Simply put, you will never be without your information. This is a relatively basic step, but it's one worth taking all the same.
DON'T forget to differentiate needs and wants. Ask yourself a question when you're about to purchase something: do I need this? If you're starting a new office job, a laptop computer may be needed. However, if you want to go away for a vacation, this can be considered a want, therefore making it less essential when looking at the bigger picture. Differentiating needs and wants will make budgeting considerably easier.
DO be prepared for the unexpected. What if you suffer some kind of medical emergency, like a broken leg? In this situation, you'll want to have an account to fall back on, which is where budgeting comes into play. With each paycheck, you should save a certain amount of money that will go into an emergency account. This will not be touched for general purposes. Only in emergencies like the aforementioned example should it be used.
DON'T create a budget unless you plan on reviewing it. As a matter of fact, this is one of the most important aspects of budgeting, no matter how much you make. Once you've recorded your spendings for the month, go back and review them. Have you been staying within your limits? Are there areas to be improved upon? By asking yourself these questions during the review process, budgeting will become that much easier.
DO use spreadsheets to make things easier for yourself. According to reputable names such as Bobby Jain, spreadsheets are ideal for keeping track of finances. Not only can they keep your data organized, so that you don't have to sift through multiple pages, but you can pull up said spreadsheets from anywhere. Simply put, you will never be without your information. This is a relatively basic step, but it's one worth taking all the same.
DON'T forget to differentiate needs and wants. Ask yourself a question when you're about to purchase something: do I need this? If you're starting a new office job, a laptop computer may be needed. However, if you want to go away for a vacation, this can be considered a want, therefore making it less essential when looking at the bigger picture. Differentiating needs and wants will make budgeting considerably easier.
DO be prepared for the unexpected. What if you suffer some kind of medical emergency, like a broken leg? In this situation, you'll want to have an account to fall back on, which is where budgeting comes into play. With each paycheck, you should save a certain amount of money that will go into an emergency account. This will not be touched for general purposes. Only in emergencies like the aforementioned example should it be used.
DON'T create a budget unless you plan on reviewing it. As a matter of fact, this is one of the most important aspects of budgeting, no matter how much you make. Once you've recorded your spendings for the month, go back and review them. Have you been staying within your limits? Are there areas to be improved upon? By asking yourself these questions during the review process, budgeting will become that much easier.
No comments:
Post a Comment