How to Budget
How to Budget & be Psychic
Some people claim to be psychic with the ability to foretell the future. Many other people would like to know what the future holds, if for no other reason than to alleviate surprises, concerns and worries. I do not claim to be a psychic, but I can foresee what my financial future is because I took the time to learn how to budget, developed a budget, and now conform my spending to that budget. I no longer have worries about or sleepless nights concerning my financial future. I have developed a careful financial plan. As long as I follow that plan, I really can foresee the future as I have predetermined that future.
You can also become a psychic concerning your financial future. Take the time to learn how to budget. It is a simple process that requires some effort on your part. I am sure that true psychics, if there are any, probably had to learn how to utilize their abilities. You must do the same.
You must realize that a budget is simply a careful plan for spending the money received in a specific period of time. To develop that careful plan, you must analyze both the money you receive and how you spend that money. A careful analysis will lead to a careful plan.
The first thing that you must consider is the money that you receive. Most people only have wages or a paycheck to consider. Even though you think that you are probably worth more money, what you get is what you have to work with. Most often, little analysis is required here, but I do recommend that you do not consider overtime pay or bonus income as a part of your basic budget.
The second thing that you must consider is how you spend your money. Most people only have a vague idea as to where their money goes. They know that they pay their mortgage or rent, buy food, and provide for transportation. Often they are then left wondering where the rest of the money went. To develop a careful plan, that is going to allow you to become psychic about your financial concerns, you must carefully analyze your spending.
The best way to gather the information about your spending that you're going to analyze for your plan is by maintaining a log. I suggest that you maintain that log or journal for two months. Write down everything that you spend. Make the appropriate allowances for things that you do not pay monthly, such as insurance or property taxes. Group your spending into categories so that when it comes time for your analysis you are looking at 25 to 30 items, rather than each expense, individually.
Does your income match or exceed your expenses? If it does, you are in better financial shape than most, and probably not reading this article anyway. But, with this type of analysis, it is possible that you might want to reassign some of your spending to better predetermine your financial future.
If your expenses exceed your income, you have some choices to make. You can increase your income, reduce your spending, or go into debt. Please! Do not go into debt. That really should not be an option. Debt is not going to let you predetermine your financial future in a satisfactory way. You might try to increase your income by taking a part time job. Do not rely on over time or bonus pay as they are not consistent enough to be included in your budget. Your best hope for balancing your budget is to reduce your spending to match your income. This is the most common method used. The log you maintained and the analysis you conducted should make it easier for you to determine the spending that you will curtail that will lead you to a successful budget.
I hope this has helped you learn how to budget. By developing this careful plan, you will be psychic in the sense that you will be able to foresee your financial future as you have predetermined it.
