Budgeting is the best way to ensure a successful financial plan, but too many people are wary of budgeting.Â The excuses are endless.Â Maybe you are one of the ones making excusees, I used to.Â So, what should you do if creating a functional budget seems harder than scaling Everest?Â Start small.
Simple Steps Begin the Budgeting Process
I will only concentrate on one of the most basic cornerstones of your budgeting actions.Â Create a daily spending list.Â I don’t care how you do it.Â You can use a pen & paper, you can use a spreadsheet, or you can write it in blood on your wall.
You do not even have to start with income.Â You probably have a pretty good idea of what is coming in, so that step shouldn’t be hard.Â If it is, start by knowing how much income you have and where it is coming from.Â If not, concentrate on your spending list.
The how could not be more simple:Â Keep strict track of every penny you spend in a day.Â If you buy a coffee in the morning, write it down.Â When you go to the grocery store, take the total and write it down. Just make sure you have enough blood and wall space.Â (The writing in blood is a joke, in case you can not feel my sarcasm in black & white). *IMPORTANT* If you are paying a bill that is a regular expense, you do not need to write it.Â I’ll teach you what to do with that in another post.Â Â Â Here is an example daily spending list:
See, you could do that, right?Â If no, and most of your transactions are done electronically, a service such as Quicken, Mint or Wesabe may be for you.Â I’ll hit on these services in greater detail soon.
This is just step one in a series of long and increasingly complicated steps to create a successful budget.Â The reasoning behind a daily spending list is two-fold.Â 1) Get an idea of where your money is going every day.Â You will be able to glance at the list every day and separate the necessary from the not-so necessary.Â 2) Open your eyes to wasted money.Â If you are blowing $10 every day on road tolls, or fast food or coffee, your daily spending list will help you realize just how much money is leaving your wallet unnecessarily.
Budgeting is a simple concept.Â Take stock of what is coming in, and allocate it to expenses so you can meet financial goals.Â Carrying it out can be difficult.Â Many variables change the entire scope of our money matters every day. If you are afraid of being a budgeting failure, take it slow…you are not going to become an expert overnight.