Fewer than one-third of Americans budget, yet we all should. Budgeting is important, because you are spending money on paper before you actually spend it. That gives you a minute to make sure you really want to spend the money on the desired thing or experience.
With your spouse or a close friend, set up spending categories, such as:
Needs - 55% of your income
- rent or mortgage
- car payment
- gas or bus money
- car/health/home insurance
- property upkeep
Wants - 25% of your income
- eating out
Savings - 20% of your income
Decide how much goes in each category (tracking your spending for a month can help you determine realistic amounts for each bucket).
Decide how much to save. Save off the top. If you have a 401k, it comes out of your paycheck automatically, without you even missing it.
Sticking with it
Sticking with it is going to be a hassle, but if you can do it for 21 days, you will have built a habit.
When you see the results, you may feel motivated to continue.
Don't give up. You might have to begin more than once. But what you achieve, in taking control of your spending, will be a blessing for the rest of your life. It will also model the value of delayed gratification for your children.
Maybe you don't have the money in the budget for that vacation you wanted to take this year. Take a staycation, reallocate how much goes in each budget category next year (fewer Starbucks stops, more packed lunches, for example), and you may find you have the money next year. That vacation will be much more relaxing knowing you didn't have to go into to debt to take it.
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