All about the challenges of Midlife Finance

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Budgeting

Budgeting your money is a talent some poses and some don’t. It is a valuable tool that can not only save your family a lot of money but also allow you to put money away. It doesn’t necessarily mean you are using this method because you don’t have money and need to watch what you are spending, it simply means that you are being smart and knowing exactly where your money goes. Even the largest of companies budget their money and it allows them to be successful. So what is the key to successful budgeting?

Goal

The first part of budgeting is knowing what will make you happy and go from there. Set a goal for yourself of what you want to spend and save and follow the plan to be successful. By setting a goal you will know the exact amounts to put aside to each category. Say it is a trip you want to save up for, or you children’s education fund that you need to be, than you can put in the exact amount and know what you need to put away in order to get what you want. Besides saving you can also budget your spending. You can set aside amounts for bills as well as spending on food and entertainment

A popular method when it comes to budgeting  is the 50/20/30 plan that says 50% should be spent on essentials, 30% should be spent on savings and 20% should be spent on personal. This is a simple method that everyone can learn to use. Another method is the zero sum budgeting method. Zero-based budgeting is a personal way to budget money where the income minus the outgo equal zero spent. Every cent of your income is accounted for and has its place. This way nothing is overspent or unaccounted for.

One thing everyone must consider is the idea of an emergency fund. Everyone is faced with unforseen expenses so you must have a fund that can be tapped into to help your family. For example, car troubles, roof leaks, burst pipes are all unexpected but require payment.

Keep Track

Besides coming up with the plan, you must follow through with it and track everything being spent. It is something that must be updated daily or at least weekly. If you don’t know where the money is going you won’t know how to proceed. For example, if you only allow a certain amount for groceries and you spent the budgeted amount already than you need to know so you don’t spend any further money on that category. The best way to do this is through a spreadsheet or personal account software like quicken or quickbooks.

Start your family budget today to get you on the right track.