The number one goal in budgeting is that you spend less than you make. This applies for personal finances. It is not just for businesses. You as a person or a family are an economic unit that needs to operate like a business. To be financially sustainable as an economic entity you must manage your spending so that you spend less than your income every day, every week, every month and every year. This is the key premise to successful budgeting. It is an attitude. You need to learn this attitude. It is the old adage…You need to have someone teach you how to fish not have someone give you some fish. The key to the key is to action the attitude of spending less than you make.
You need to look at the fundamentals of your budget. There is the income side and there is the spending side. On the income side you may have a nice steady job where you get paid bi-weekly. Other folks have jobs or businesses that pay in cycles or are seasonal. There are budgets so that you can get a snapshot of your income. This way you know when your income comes in. The idea of a budget is that when you know when your income is coming in you can plan how to spend it so that you spend less than you make. If you are on a bi-weekly schedule it is routine. If you are on a seasonal income where you make most of your income in 3 or 6 months of the year, you need to plan your spending so that you save money when you have. You save the appropriate amount to spend when the income is low in the off season. Continue reading ‘The Key to Successful Budgeting’ »
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