How To Manage A Monthly Budget

Maybe you’re looking to save up a little extra money for the holidays or for a purchase you’ve been thinking about for a while.

Maybe retirement is on your mind. Maybe you just want to be more minimal in your spending and are attempting to curtail your part in the world’s rampant consumerism. Maybe you are just curious how much you spend on things.

Whatever your reason for creating a monthly budget, there are countless things to be gained by paying attention to your spending habits. Knowing how and why you are saving your money can help you to achieve your financial goals throughout your lifetime. With the right savings setup, you can be assured that you will be prepared for anything financially. For more additional information on achieving your financial goal be sure to visit  carapalmer.com.

Before Your Budget Get Your Mindset Right

This is probably going to be the hardest step of all, but it is also the most important. You’re going to want to take a mental moment—some time where you get really quiet and still and present and think about money and finances. Take note of any harsh reactions or difficult emotions that arise within you. Question the things you believe about money and financial standing. A lot of people try to skip this step as it is so uncomfortable, but study after study has proven that our beliefs about ourselves and the world have a major impact on our lives. All lasting change involves a mindset shift of some kind.

Starting at a very young age, we are all programmed to believe certain things about ourselves, the world around us, and, you guessed it, money. These beliefs can turn out to be entirely wrong and harmful. For example:

• • I’ll never have money no matter what I do
  • I’m meant to be poor
  • If I save up anything something bad will happen, like the car breaking down, and then I’ll be back where I started
  • Poor people are good

• The only way to make money is to do bad things
• I can’t afford the things I want

The list of common negative beliefs about money goes on and on. It takes a conscious effort to change these beliefs. Ask yourself if what you believe about money is actually true. Ask yourself how you’d feel if you believed something different.

Start With Your Spending

Here’s where this article is going to be a little different from the rest. Most budget advice pages suggest that you begin with your income and work backward from there, but in our experience this budgeting approach often leaves people setting extremely unrealistic goals for themselves, resulting in feeling deeply disappointed and disheartened and giving up on what is otherwise a worthy goal.

Before you make any sort of budget or think about how much money you want to spend on different things in your life, pay attention to your purchases for an entire month. Save every receipt, write down each thing you buy. Compile all the data. Don’t judge yourself while you do this, just take note of everything. If this is difficult for you, you might want to consider finding an app that can help. This works as a better starting point because so few people have a proper awareness of their spending, and how much things actually cost.

Craft Your Budget With Small Improvements In Mind

This is where your income is used. Write down your income and all of your expenses and your goal for next month’s expenditures. Make sure that your goal spending is not too drastic for you and your habits. Again, we’re trying to avoid sensations of disappointment which will result in you giving up on the goal of spending wisely. Work on a maximum of one or two areas at a time. For example, perhaps you noticed you spend a little too much on entertainment and takeout meals. Try to decrease your spending in those areas, by a percentage.

Of course, you can begin to think about bigger changes as well. You might consider moving because rent is absurd or the cost to get to work is foolishly high. Maybe you’ll think about trading in your car for one with better gas mileage. These bigger goals are wonderful as well, but will likely take some time to organize before you feel the results. The point of making small changes first is to give yourself a little positive feedback. It turns out that saving money can feel really good, it can be motivating. It can even be fun. Once you’ve managed to find this mindset, nothing can stand in your way.

Consider the 50/30/20 Rule

This finance gem has been around for a long time, and for good reason. The 50/30/20 rule is simple to follow and has lasting positive results on anyone’s financial circumstances. The rule suggests that 50% of your income be spent on needs (things like rent and groceries), 30% be spent on wants (the fun stuff you like to buy but will survive without), and 20% be put away as savings. Many people have had extremely positive results with this rule.

The above tips will make it simple for you to create a realistic monthly budget that actually helps you minimize unnecessary spending. If you find yourself in deep financial turmoil, it is always wise to reach out. Speak to a friend or family member or a financial professional. There are people in the world who would be happy to help you through a difficult financial time.