If your goal is to clear your debt burden and live debt
free, you need a personal or family budget. This is what
you really want, is it not? Most folks think that preparing
and sticking to a budget is too time consuming and no
fun at all. However, you can complete your own
personal/family budget in an evening and have fun doing it.
Preparing your personal/family budget can be an energizing
project. Maybe, for the first time you will see the full
extent of your debts and make the commitment to fix your
finances once and for all. Are you ready to make a start?
Great! Let's go.
Benefit #1 - A personal budget shows your true financial
position
If you don't have a budget how can you see your spending
compared to your income? This information is at the heart
of the budget process. It has the power to help you realize
whether you are living within your means or on borrowed
funds. It can show you where your income goes and whether
you are spending it wisely, or not. It also shows how much
of your income is being used to pay off previous credit
purchases (plus interest).
Benefit #2 - Budgets show how much to set aside for savings
If you have set up your budget correctly you will easily
see how much you need to save from every pay to cover
emergencies, credit card repayments and household asset
replacements. Once you make a commitment to yourself to
make this work, the budget becomes a tool that will help
you stay on track.
Benefit #3 - Keeps you mindful of your goals
If you do not commit to making the budget work, you can
easily slip back into your old ways and habits. If you are
tempted to give in, the budget goals are there as a guide
to help you understand how important it is to make your
commitment stick. When you see sale items, the budget
can help you see clearly whether the item is a worthwhile
purchase or not. You can now make a choice as to whether
that purchase is the very best use of your funds
Benefit #4 - Keeps you from spending money you don't have
Each time you spend, it either adds to or detracts from,
your overall financial position. The personal budget can
show you the impact of your proposed expenditure in
advance. You don't have unlimited income. If you spend more
than you earn you pay the price and the price is interest.
This interest is often the cause of your hardship now.
Benefit #5 - Puts you in financial control
Once you've set up your budget correctly it will show you
how much you have available to spend each month and how
much you need to put aside for savings and emergencies.
This information will make you feel a lot better about
yourself when you know that there is cash to buy the things
you need and want. When you know you can afford a luxury
occasionally, it makes you feel confident and relaxed -
not stressed and worried as before.
Benefit #6 - Shows the progress to meeting your goals.
Don't leave you budget in the kitchen drawer once it is
completed. Refer to it weekly, or at least monthly. It is
your guide to debt freedom. Keep checking your progress.
It will give you the motivation to make the right
decisions for you and your family.
You can see that all it takes is a little commitment and
effort to get you on the path to financial freedom. Isn't
it worth that little effort? Looking back, with the debts
paid off, you'll agree that it was definitely worth it।
Bruce Hokin has designed a simple budget tool called "5 Steps to Freedom Personal Budget." It based on his extensive background as a qualified, experienced accountant, manager, consultant and financial adviser. You can download this powerful budget assistant today and be on your way to financial freedom within the hour. You can also click here for your FREE Mini-Budget.
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