How to Budget Properly

Learning how to budget is an effective way to eliminate debt. Here are five way you can become an effective budgeter


1 . Start Early

Starting early allows you to experiment and make mistakes. Learning from my mistakes during my 20s allowed me to discover my financial spending limits. By understanding my financial limits at an early age I was able to set up a budget that was both realistic and easy to follow

2 . Use the Available Resources

The first of many steps in effective budgeting is going online and looking for resources. One useful tool that I used to build my budget is PersonalFinanceCanada on Reddit. For Canadians, this is the ultimate resource for budget planning. Not only is it a resource for amazing advice but also provides budget planners, net worth calculators and other great financial goodies

3. Answer the Hard Questions

Before you even start thinking about a budget you will need to answer the hard questions. Are you going to be aggressive or passive? Will you track your spending daily, monthly or even yearly? Is this a long term commitment or new year’s resolution that will only last a week? By answering the hard questions you will be ready to build your budget

4. Create Accountability

Accountability is the key to successful budgeting. When creating your first budget you should find someone you trust to build accountability. After finding that special someone set up a 15-minute window once a week to report on your budgeting success and failures. Not only is this an incentive for you to follow through on your budget but also reduce the burdens of the budgeting process.

5. Understand That Your Human

Finally, understand that above all you are human. Humans are inclined to fail and make mistakes. This is an important lesson as there will be days when you forget to track your spending or you somehow splash 3000 dollars on those special Nikes. Do not sweat the small things and understand that becoming an effective budgeter is a marathon and not a race

Advertisements

One thought on “How to Budget Properly

  1. My personal experience has been that you need to start simple and keep at it since the first 90 days will throw you off. It’s the most challenging period. After that you get a hang of it. You’ll start to see the benefits of it. I started with EveryDollar app and moved onto YNalAB now.

    Liked by 1 person

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s