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Coins, pens and a budget sheet

Money Matters: How to Set and Follow a Personal Spending Budget

Something Everyone Can and Should Do

According to a Princeton study, two-thirds of Americans aren’t living on a budget. Maybe you love planning; maybe you squirm at the thought of spreadsheets. Either way, a budget is your best shot at financial success. You have worked hard to earn that paycheck, now take a look at this two-step process to make sure your budget makes those dollars stretch as far as they can go.

The Budget 2-Step Process

1. Set your budget. This is the easiest step and the most difficult step, but it is crucial. There is a lot of computer software out there to help you with your planning like Excel or QuickBooks. Also, you can choose from several useful apps that help you track your spending like Mint or EveryDollar. But don’t just track your money, plan it.

Expense allocation should take place at the beginning of each month. That way you have a clear visual on what bills are coming versus how much money you will bring in. Try to “pay yourself first” by listing your savings goals at the top of your spreadsheet. Too often, people put saving last then come up short before they get there. It is far easier to save money first and live off the rest, rather than the reverse.

2. Follow your budget. This next step takes diligence. Perhaps this is why only 32% of Americans are willing to do it. But what you will see when you start to improve each month and learn more about your spending habits is that you will have more money left over. With this process, you will see your savings account grow, your debts be reduced and your overall progress improve. In time, you WILL make headway. It truly is like receiving a raise when you see your hard-earned dollars go farther each month.

Remember, setting and following a budget is like training for a marathon. It’s not easy, but it is highly rewarding. Seek advice, practice, find useful apps related to finance, spreadsheets and any other computer software that might help you “train” better. The most powerful resource in all of this is your income. Keep in mind where you want to go in life, then begin telling your income to head in that direction. Track it along the way and you’ll be good to go.