It is all very well telling someone they must budget and live below their means, but what does it really mean when you are living on a budget? Does it mean you go without? How does it work in the real world, how do you manage a budget and live a normal life? These are often questions I’m asked when it comes to budgeting in the real world and how I help to deal with all the problems.
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Living On A Budget Organization
When you make decision to live on a budget you take a commitment that you are going to take control of your finances and create a system that allows you to organize your money in a way that you understand.
This system must work for you, therefore, it needs to take into account how you work and how your mind functions. Some people prefer pen and paper others prefer to do the budget electronically and the most important thing to remember is to go with what you are comfortable with.
If you just want to jot it down on a scrap of paper or go elaborate with a spreadsheet, the most important thing to remember is that you have to work the system it needs to fit with you for the likelihood of it working, improves.
Things Will Go Wrong
Life has a way of getting in the way and this can mean that good intentions can slip and you might make a wrong budgeting decision. The point is that these happen and you just have to live with those choices and move forward.
It takes time to perfect a budget system that actually works and sometimes it still isn’t smooth sailing because an unexpected bill will arise and can throw a spanner into the working of your budget.
If this happens take a step back and reassess your budget. A budget isn’t set in stone and it will move with you, learning how to deal with the situation when things do go wrong is an important budgeting skill that will help you improve your financial understanding.
Living Within Your Means
When you make a budget, it will only work if you are living within your means. If you are spending more than you make there is a problem and you need help to fix this before it takes over.
There is no easy way to avoid the situation, if you are spending more money than you have coming in you need to cut back on your spending, or get another job to pay for the extra spending.
Creating A Budget
Creating a budget that works and you are able to put into practice is not easy. Actually creating a budget for some is difficult enough, but then putting into practice the concept of actually controlling what you spend and not spending more than you have budgeted in each category, is hard.
You can suddenly realize that the easy thing is creating the budget, the hardest part is working with the budget and actually sticking with it.
If you are looking for more information on budgeting, I love the way Dave Ramsey discusses budgets and money!
Learning how to cut back in some areas and not having the money to do what you want.
It is hard for me sometimes to go around a supermarket and see people’s trollies full and they are just putting in what they want without thinking about the price or if they have enough money in their budget. I know that some of these people are putting their expenses on credit and then either paying it off in full or adding to the debt they already owe.
Yes, it would be nice not to have to worry about money or the amounts you are spending, but in reality, this is not good money sense and it becomes difficult to understand what you have and the true value of money without understanding what it is like to live within the constraints of a tight budget.
However, creating a budget and sticking within those limits teaches you more about managing your money than anything else you can do.
Dealing With Peer Pressure While Living On A Budget
We have all had those friends or family who try to encourage you to spend more money than what you have. It is hard to tell people you can’t afford something, or you have no money which to go out with.
Standing up against this is tough, not only are you faced with the constant pressure from other people, the advertising and short-term loans is high.
Borrowing money to live is not an option that you should consider, you must look at what you are spending and to take the time to stick to your budget. If your friends are pressuring you to go out when you have no money, in truth they can’t be that great a friend, who would want to see you in financial trouble.
What are your best tips for living on a budget? Comment below!
Therefore, the road to a successful budget is not easy, there are times when you wish you had more money. However, it is so much better to live your life with purpose and focus and have the money for the things that you want and need. By creating and living on a budget, it gives you the freedom to spend your money on the things that you need, it can help to reduce the cost of credit and this can save you lots of money in interest payments too!