“If you can’t be with the stuff you love, love the stuff you’re with.”
The first step to setting up a financial plan is to manage your cash flow. It is important to know where your money is coming from and where it is going. One of the simplest ways to accomplish this is to set up a budget. The word “budget” typically has a negative connotation. However, budgeting can be very empowering.
Setting up and sticking to a budget, gives you power and control over your spending. Knowing where you spend your money enables you to make intentional decisions on what, how, and where you spend, rather than just letting it go without thinking about it. And, as the saying goes, “knowing is half the battle.”
You might be asking yourself if you really need a budget. In my opinion, EVERYONE needs a budget. But just in case you are not sure, here are a few things to help you decide if you really need help:
- Your bills are always due…yesterday.
- You have no idea how much you spend or on what.
- Your wallet is overflowing with credit cards.
- You rob Peter to pay Paul.
The keys to successful budgeting are:
- You must be committed. You must be willing to modify your behavior. It is a change in spending habits.
- You must be diligent. It requires hard work. Track your spending and stick to it!
- The budget must be realistic. Budgeting is similar to dieting. Do not say that you are going to lose 10 pounds per week, and you have not lost 10 pounds in a year! You are setting yourself up for failure. In other words, don’t say that you are going to save $1,000 a month, when you have not saved $100 all year. The minute you miss the goal, you will stop. It makes more sense to set a goal such as this, “I will save $1,000 by the end of the year.”
There are many different types/kinds of budgets available. Below is a simple budget formula to get you started. For your financial needs, contact at KRS Wealth Management at 407-425-9101.