Tips to Start Personal Budgets

 Setting up a personal budget can be a daunting event that typically gets looked at when cash-out seems to be outpacing cash-in.  

A few key thoughts to keep in mind while getting started is to give yourself grace, changing to a budget is difficult and uncomfortable. 

The best way to make a dynamic change is to take small steps, keep it simple, and methodical.  As your knowledge grows, you can add complexity.  Like a muscle, your fiscal fitness requires a workout.  The following are items to consider:

1.  Decide to start.  This is obvious and also the most difficult step.  Sitting down, taking a deep breath and saying, I'm going to do a budget.  Have the paper, computer, iPad or whatever medium you want to use available to avoid interruptions.  Once the train is rolling, you don't want it to stop.

2.  Budget every month.  Every month can have different income and expenses.  The assumption that a monthly budget is good for the year may have some pitfalls.  There may be a month you have a Vet bill. Car bill, etc. that may or may not be planned.  At any rate, it is not a consistent expense.

3.  Save first.  Every month, plan to save a portion of your income.  Pay yourself first.  This will build a nest egg and help reach the goal of saving more than you spend.  Start out small and grow when ready.  A fractional amount saved will bring peace long term.

4.  Important expense categories.  Track important expense categories; food, shelter clothes, transportation, etc.  Tailor this to your situation on what is important.  To simplify the process track a few key categories.  For example, if stopping at the coffee shop is part of the daily routine, track the expenses.  The tracking will enable the ability to sit back and reflect on the value.

Let budgeting become a part of your daily routine.  

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