How to Create a Budget | Making Adjustments

Is your budget balanced?  If so, you can stop reading here.  Or contact me to guest post.  Because I’ll be honest- it took me nearly a year to get my budget balanced. 

Budgeting can be tough because it is a very fluid process.  Income changes, expenses change, financial goals shift.  And in the beginning you will spend a while just learning how much you spend on certain things. 

All this creates a long learning curve.  But don’t give up.  Because it all becomes worth it when you finally are in control of your money.

There are two problems that can arise from an unbalanced budget.  1) You have more income than you do expenses and are just blowing the extra on crap or 2) you don’t have enough money to make ends meet and are drowning in bills.

I’ve been in both of those places and while the first one looks pretty good, it feels pretty awful when you’re barely treading water because you know that money could have been used to keep you out of financial trouble in the first place.

If you’re in that kind of place now, you’re most likely going to need to do some cutting on your budget.  There are lots of little things you can do to trim a little here and there.  Stop buying new clothes for a while, try to reuse as much as possible, or give up soda/coffee/beer. 

If you are in bigger trouble, you may have to look at more drastic changes like contacting your mortgage company for assistance or moving to a less expensive home.  Because if your expenses are barely met by your income or exceed it, you’re never going to gain any ground.

The key is living BELOW your means.

If you are living below your means you will have surplus income.  Surplus income that you can use to fulfill your goals.  Whether it be paying off your debt or saving for retirement or learning how to skydive, that money will be more valuable to you used in a way that will enhance your life long-term than had you spent it at the bar last Friday. 

Don’t get me wrong, I have lots of good memories from spending (many) nights at the bar with friends, but if I had even half of that money back in my pocket, I probably wouldn’t be up to my eyeballs in debt.

Now if one of your life goals is spending more time with friends and you can afford to do it at the bar responsibly, I’m not saying you should never indulge.  I am a firm believer of all things in moderation.  But moderation is kinda tough at the bar.

Moral of the story?  Live below your means.  Have a plan for surplus income.  And just. say. no. to that third martini.

Looks like we might be going into a fourth installment…

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