While you are tracking your income and spending every single day, it can start to become a little repetitive and boring to continue doing it consistently. This is where a lot of the people stop budgeting and distrust this method. But budgeting without a doubt one of the most effective financial planning tools you can be using. So what is the problem and how can you find motivation for it again?
You’re Over Focusing On Details
Perhaps, you’ve been paying attention to only the details – how many pennies you saved on that recent sale, or how much you earned in your investment last hour. Perhaps you forgot the main reason you started doing this and need to revisit your aspirations. Budgeting is not just how you use your earned money during the month, but it is also about your improvement, progress towards aspirations, the accumulation of wealth that comes with it.
Make Your Monthly Budget Into A Cash Flow
I like to see budget plan as a cash flow in business. A single average person maybe doesn’t have as many inflows as a business might, but you get the point – it helps to stay on track. If you lay out monthly budgets one after another, then you should be able to see where your plan is taking you. And if you got a regular income, then your budget plan will show you that you’ll have a certain amount of money saved, spent or earned. Seeing those in big sums can be motivating for many people.
If you have a lot of different expenditures I can suggest to you to break them up into groups and make mini budgets for each of them separately. It sounds like I’m giving you more things to do, but actually it saves you time greatly. Just make sure that you have main groups like Housing (that includes mortgage, repair, refitting, taxes), Utilities, Subscriptions and contracts, Transportation, Insurance, Health, Food, and Personal.
Project Your Income And Expenses
Even if you don’t know how much you’ll spend next month exactly, knowing how you used your money for the past months can give you an idea. If you don’t have many months recorded in your budget, I suggest that you start with recording and grouping up expenses for the last month or two to get some indications for next month expectations.
Then just copy and paste the expenses and incomes into next month creating a projection. Although this is not going to tell you exactly how much money you’ll accumulate over these months. To find that out, simply add up the income to expense differences of every month.
Now, do you like what you see? Is this a good rate of growth for you, or you expected more? How this will affect your financial aspirations? How this will affect your income next year?
Improve On What You Can Measure
The whole point of having a budget is so that it gives you clarity and control over your finances. We cannot improve on what we can’t see or measure. Even if we could, it would be just swimming in a general area and wasting time and energy pointing in random directions. If you can see the bigger picture of what budgeting can do for you it becomes that much easier to committing to it.
Thank you for reading this post, I’ll be back to you with more money wisdom’s for artists tomorrow!
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