One of the most popular questions I receive all the time is, "How do I set up my personal budget?"
A personal budget should only take as long as you can commit to using it on a regular basis. What we mean by that is if you spend 30 minutes going over your finances every week, then your budget needs to be easy to update during that 30 minute time frame.
Making it easy to update is based on the time that you have set aside to work on it. In our example above, if you spend 30 minutes working on your finances every week, then you need a general budget with generic categories and wider margins to account for. Let's give an example.
Take the category of food. We can make that as detailed or generic as we need to in order to improve our budgeting time and effort.
A quick, generic tag for tracking money spent on food:
Now if you are a person with more time and you need to drill it down a little more so you can focus on more specific expense categories, then it may look like this.
Should you want to be more specific and detailed:
The choice is yours based upon how much time and detail need to be in your budget in order to address your financial situaton. Someone that is severely struggling with money will need to spend more time tracking their finances than someone farther along in their journey. Remember, the best personal budget is one that you will use and update on a regular basis. It doesn't matter how fancy or beautiful the budget is if you don't use it.
We believe a personal budget should be fun and easy to do, that's why we provide a free budget tool to help you start on your journey.
I had the pleaseure of reading an excellent article over the weekend that really drove home a few things for me. It was entitled, "4 Massive Financial Scams Sold to Americans on an Everyday Basis". I will provide a quick synopsis below.
Basically, the article goes on to say that the average american is sold 4 huge lies while growing up. They are that you must buy a house, you should avoid all debt, you have to go to college, and you need to save as much money as possible. I have spoken in the past on these subjects and my new book, Start Winning With Money, specifically discusses this as well.
A great article from Bigger Pockets that I just had to share with the community!
My new book is now available for pre-order on Amazon!
Coming August 1, 2017!