Make It Your “Best Budget Month”
February 14th, 2008 | by rachel |
February is a great month for dealing with financial issues because money doesn’t have to stretch as far. It’s not quite time to panic about taxes yet so there is plenty of time to get records together and make appointments with tax professionals. The holidays and football season are over. There are not any good excuses for not turning your attention toward your money. Even if you have NEVER paid any attention to your finances or the budgeting process before, it’s not too late. These 3 steps can make February your “Best Budget Month”!
1. Define the starting point. A budget is nothing more than a plan. To make a plan feasible and effective, it has to have a beginning. Without question, you CAN plan a budget and you CAN live on a budget. As soon as you make up your mind to do so!
- To get started, look at your calendar and mark a specific date (and time, if you want) when you will “begin the budget”. Highlight it; put a star on it; label it with dollar signs! Do whatever you need to do to make it stand out as the starting point for your budget.
- Before that date, gather any information you can find regarding your finances. In particular, information about bank accounts, retirement funds, credit card accounts, monthly utilities/expenses, mortgage and car loans, etc. will be necessary when you actually put your budget on paper.
2. Determine the highest financial priority. Generally, formal plans address specific goals to be achieved and methods for achieving those goals. A financial plan, or budget, is no different. For you, at this point, numbers, time frame and other specifics are not important.
- Make a written list of any and all financial goals that you have.
- Mark the most important goal on the list.
Be aware that your goals and priorities will change over time and as your circumstances change. It’s not a problem to have changing goals and priorities. It’s only a problem to not have any at all!
3. Document expenses. It is impossible to develop or maintain a budget of any kind without accurate information. Likewise, a budget must have a tangible starting point. Documented expenses are the starting point necessary for any budget.
- For a minimum of 10 days, document every time you spend ANY money.
- Make notes on receipts to indicate what expenditures were for and how they were paid for (cash, debit, credit card, check, etc.).
- Be sure to include small cash expenditures (tolls, vending machines, etc.).
No matter what your financial circumstances are, it’s never too late to create and maintain a budget. Don’t let February get away before you take these simple steps to get control of your money. If (and when) you do, it will be your best budget month ever!