If you’re like most people you loathe the word budget. It’s the equivalent of a four-letter word to some, but in many cases it’s a necessary evil to reach financial goals. Budgeting doesn’t have to be dreadful but can be easy!
Evaluate your finances: Take a good look at what you spent you spend your money on each month. Do you find you spend way too much dining out or maybe your cable bill is out of control? Those areas may be where you could carve out additional money to save.
Do you have a specific savings goal? If not, make sure you have at least 3-6 months living expenses set aside. Once you determine your monthly savings goals adjust your budget to meet them.
Auto-pay your recurrent monthly bills: The easiest way to budget is to set your recurrent monthly bills on auto-pay like your cable, phone, electricity, etc. Take analysis of these expenses and see if they are really necessary. Some of these expenses may be negotiable. Do you really need to spend $200 on Dish TV when you can get by with Netflix, Hulu or a Roku for a fraction of the price?
Put yourself on a “cash diet:” The third aspect of your budget should consist of a “cash diet” for your variable monthly expenses. Variable monthly expenses include grocery, clothing and entertainment.
Set aside a certain amount of cash for each expense and place it in an envelope. Spend only what is in the envelope on the allotted expense. When the envelope is empty, your spending is done for the month.
If you happen to have money left over at the end of the month roll that money over into the next month if you want extra money to spend in that area. You can even add the extra money to another envelope if you want. The point is to not increase your spending money by adding additional money outside of your budgeted envelope money. Say you have 4 envelopes divided into four different categories and the total money of all envelopes combined is $500 and you place $125 in each envelope at the beginning of the month. If you find at the end of the month you have an additional $25 in one envelope feel free to move it to another envelope you feel you need more money in.
If you tend to run out of money earlier in the month than you expected then you either need to scale back on your spending even more or allot for more money in that category.
Remember to pay yourself: After setting up the previous three aspects of your budget the saving part should be easy. Everything left over from your monthly bills should be placed in a savings account.
When you budget for a couple of months you’ll have an idea of how much you can comfortably save each month. As a matter of fact, make your monthly savings a “recurrent monthly bill.” Set your savings up on an auto-pay just like your bills.
Remember to continually look for ways to save more money through your budget. Maybe you could put your extra envelope money at the end of the month into your savings instead of another envelope? Make it a habit to follow these four steps and watch your savings grow!
In addition to working as a FNP, Nachole Johnson is a freelance copywriter and an author with her book, You’re a Nurse and Want to Start Your Own Business? The Complete Guide, available on Amazon. Visit her ReNursing blog at www.renursing.com for more ideas on how to reinvent your career