A good budget is a valuable resource for every individual and family. Budgets have the ability to make you more financially responsible and help you to keep up with your finances better. People that do the best job of handling their finances stick to their budgets. A winning budget can put you on the right track to financial success. Here are a few of the traits of a winning budget.
Realistic In Nature
The best budgets are ones that are factual and realistic. Too many people make budgets that are just wishful thinking and not real. A winning budget is one that properly addresses all of your budgetary needs and accounts for both income and expenses. A real budget should take all of your expenses into account and allocate every single dime to some category. The leftover funds should even be designated as going into savings or used for some other expense (i.e. paying off your student loans or . You are much more likely to stick to a realistic budget than one that just looks good on paper. This is especially true if you want to consolidate debt.
Simple To Create
A winning budget is not overly complex and is simple to read. Businesses need really long detailed complex budgets that take up multiple pages. Your budget only needs to be a page that details the money that you have coming in and the money that you have going out. A budget should not be simple to put together. You can either use a sheet of paper, a spreadsheet or some computer software. There are lots of free online software programs that will create a budget for you just by entering your monetary totals. You will spend less time writing up a budget and more time sticking to it with these tools.
Plenty of Categories
A budget needs to have enough categories that it makes it easy for you to track exactly where your money is going. You could create a budget with a category that uses a broad term like Entertainment but that will not tell you where your money is going. It would be better to create a budget with a heading of Entertainment and subheadings that reference topics like movies, athletic events, and dining out. This will give you a clearer picture of your expenses and help you to make adjustments as needed. An accurate budget is a budgeter’s best friend.
The one area that most budgets fail to address the most are cash expenses. It is easy to keep track of purchases that you make using your debit and credit card because you get a written record of these transactions online. The only think that cash transactions generate is a receipt and that often does not even list the purpose. You either need to keep a list of all of your cash receipts yourself or you need to make every single purchase using a debit card. Those are the best two ways to keep track of the cash that you spend day to day. Those small five to ten dollars daily cash transactions could be the thing that is blowing up your budget.