Building a budget doesn’t have to be boring and it doesn’t mean you’ll never get to spend any of your money on fun stuff.
If you make a good budget for yourself, you’ll be able to build a solid financial future without having to stress about money.
In this post, you’ll find out how to build a money plan you feel good about.
Step #1: Consider Why You Want a Budget
Before you pull out the spreadsheets and calculators, think about why you’re deciding to create a money plan in the first place.
Here are some possible reasons for wanting to develop a budget:
- Saving for retirement. Building up your retirement accounts to make sure you have money in your golden years.
- Building an emergency fund. Saving 3-6 months’ worth of expenses for rainy days.
- Buying a house. Saving to buy your own property so you can stop making your landlord rich.
- Buying a car. Using saved money for a down payment on a car or purchasing your vehicle with cash.
- Paying off debt. Paying down debt to pave the way for financial freedom.
- Putting away money for college for yourself, a spouse or your children.
- Saving for a vacation or other big purchases. Making a monthly fund that will allow you to put money toward large buys.
Step #2: Collect Information and Write it Down
Decide whether you’ll use a spreadsheet or a budgeting app. Popular budgeting apps include You Need a Budget, Mint or Dave Ramsey’s Every Dollar.
Gather the amounts from your income and expenses and enter them into your budgeting app or spreadsheet.
Step #3: Prioritize Your Goals
In Step #1, you listed one or more reasons why you wanted to do a budget. Think about those goals now and allocate as much money as you’d like toward the accounts.
For instance, if you’re trying to buy a house, increase your efforts for this account while allotting regular payments on everything else.
Step #4: Set Aside Happiness Money
Here’s the fun part. Rather then sending all your money away to everybody else or saving it, make a fund for happiness money.
Happiness money can be spent on anything that makes you feel good. Here are some ideas:
- A fancy dinner. Love to cook? Buy some fancy ingredients for a comforting meal for family or friends.
- Movies or concert tickets. Getting a seat to watch an entertaining show or film can give you a fun experience you’ll remember for life.
- Be a tourist in your own town. Every town has something interesting to see, from hiking to museums and landmarks. Plan a visit and take some Instagrammable photos.
- Gifts. Giving to someone important can give you a sense of fulfillment, especially when it’s well-planned.
- DIY Projects. Set aside some money for house projects, at-home beauty treatments and other do-it-yourself projects.
Now that you have the steps to a budget you feel good about, all you need to do is track your spending and stick to the money plan.
Creating and following a money plan doesn’t have to be tedious or restrictive, if you budget for your goals and happiness. Start by assessing your reasons for wanting a budget. Then, enter your income and expenses and prioritize goals. Lastly, make room for fun and happiness in your money plan. Want more financial tips? Schedule your FREE consultation here