Let’s be real…. Your budget is your financial lifeline!
If you blow the bottom out of your budget, chances are you are out of money. Nobody likes feeling as if they have to hold on to the last $50 in their bank account until they get paid NEXT WEEK. Sticking to your budget is vital to keeping this thing afloat. Many of us are literally one purchase away from taking out a payday loan.
The Key is to Budget! When writing your budget
Most people think that creating a budget is sentencing themselves to a lifetime of eating only rice & beans. That’s actually is the furthest thing from the truth. You can have a budget and still live a luxurious life. The secret to an amazing budget is including items, NOT excluding them.
Here are a few things that you might have missed when writing your monthly budget:
1. Savings
You should always factor your savings into your monthly budget. Ideally 20% of your income should go to savings. If you are just starting off then start at 10% and increase the percentage as you go.
2. Emergency Fund
Having an emergency fund (Rainy Day Fund) in this day and age is vital. Whether you have a family or you are single you need to have at least 6 months of your expenses in savings. This means that if you were to lose your primary source of income you would be able to survive solely off of your savings for 6 complete months. Be sure that you keep your emergency fund separate from your regular savings. If you do not have an emergency fund focus your energy on building your emergency fund before you start funding your regular savings.
3. Life Insurance
Please don’t be mad at me but ……..GoFundMe is not a life insurance policy. As an individual ( with a family or not) it is your responsibility to be sure that if you are gone your loved ones can properly manage your estate. Better yet, not go into debt because of it.
Part of managing your finances is thinking past your present and planning for the inevitable. If you have children or family that you provide for, you should be making sure that if you are gone they can still be provided for financially. What kind of impact would it have on your loved ones if you were not here tomorrow? Take this into account and work life insurance into your monthly budget.
4. Vacations/Travel
Travel is something that is important to most people in this day. Instead of dipping into your savings and deciding on impulse to take a trip it’s much easier to simply plan your trips ahead of time. Before the year starts sit down and think of some of the trips you would like to take. Figure out the expenses associated with each trip and put away money each month to pay for your trip.
5. Personal Treats
Maybe you like to get your nails done every two weeks…….. or get your hair cut once a week. There is nothing wrong with taking care of yourself! It’s actually good to make sure you are taking care of YOU! Just remember to add these things into your budget. No additional dollar should go unaccounted for.
Keep in mind, budgeting does not have to be complicated! Just be intentional and strategic when writing your budget. Make sure that you remember to account for every single dollar spent!
If you need help getting started with your monthly budget, a great place to start is to create a monthly bill chart. Write out all of your bills and each of their due dates. This will give you a starting place so that you can see what you are currently spending each month. From there you can start your budget and even cut back if you need to.
Those are the 5 things to Include In Your Monthly Budget. Trust me including these things make such a big difference in your life.
Keep up with Kai on her blog here. While you’re at it come back next week for more finance tips.
