When someone creates a budget, he or she knows how much money they bring in and what they spend. This allows them to be more mindful when it comes to their funds, which is a practice that the likes of Robert Jain can recommend. Budgeting is a worthwhile practice to carry out, but there are a few ways to ensure that it's done well. For the uninitiated, here are some do's and don'ts that you would be wise to follow.
DO use spreadsheets to make things easier for yourself. According to reputable names such as Bobby Jain, spreadsheets are ideal for keeping track of finances. Not only can they keep your data organized, so that you don't have to sift through multiple pages, but you can pull up said spreadsheets from anywhere. Simply put, you will never be without your information. This is a relatively basic step, but it's one worth taking all the same.
DON'T discredit the importance of needs versus wants. As a matter of fact, this can make all the difference when it comes to budgeting. When buying anything, you should determine if it's a need or a want first. If it's something that you cannot be without, like food or toiletries, it's a need that should be prioritized. If it's a luxury item that would be nice to have, but not necessary, it's a want to be set aside until you can confidently invest in it.
DO account for emergencies that may arise. These include, but aren't limited to, broken bones, job loss, and automotive costs. Before these arise, it's in your best interest to create an emergency account. What this will do is allow you to slowly save money over the course of time. Before you know it, you'll have a sizable account that will only be used in these types of emergencies. Having a separate account goes a long way from a budgeting standpoint.
DON'T forget to review your spendings. No matter how confident you might be, as far as budgeting is concerned, you should review your spendings all the same. Make sure that you do this at the beginning of each month so that you have a clear understanding of how much you've spent the month prior. If you feel like there is room for improvement, make note of it so that you can apply such changes in the future.
DO use spreadsheets to make things easier for yourself. According to reputable names such as Bobby Jain, spreadsheets are ideal for keeping track of finances. Not only can they keep your data organized, so that you don't have to sift through multiple pages, but you can pull up said spreadsheets from anywhere. Simply put, you will never be without your information. This is a relatively basic step, but it's one worth taking all the same.
DON'T discredit the importance of needs versus wants. As a matter of fact, this can make all the difference when it comes to budgeting. When buying anything, you should determine if it's a need or a want first. If it's something that you cannot be without, like food or toiletries, it's a need that should be prioritized. If it's a luxury item that would be nice to have, but not necessary, it's a want to be set aside until you can confidently invest in it.
DO account for emergencies that may arise. These include, but aren't limited to, broken bones, job loss, and automotive costs. Before these arise, it's in your best interest to create an emergency account. What this will do is allow you to slowly save money over the course of time. Before you know it, you'll have a sizable account that will only be used in these types of emergencies. Having a separate account goes a long way from a budgeting standpoint.
DON'T forget to review your spendings. No matter how confident you might be, as far as budgeting is concerned, you should review your spendings all the same. Make sure that you do this at the beginning of each month so that you have a clear understanding of how much you've spent the month prior. If you feel like there is room for improvement, make note of it so that you can apply such changes in the future.
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Please consult Bob Jain for further information about what you have just read.. Also published at Robert Jain: The Do's And Don'ts Of Budgeting.
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