Thursday, January 8, 2015, AM | 1 Comment
A budget can be an invaluable tool for managing your finances. A budget can also become complex and difficult to follow over time. You need to keep it as simple as possible.
Several ideas will help to make your budget easier to understand.
Take Advantage of Automatic Payments and Deposits
Your budget can become bloated and overly complex if you need to track the dates of deposits and payments sent through the mail.
Take advantage of automatic online payments and direct deposits. This lets you know bills have been paid and paychecks are cashed immediately.
Try to pay your bills all on the same day to keep things simple. Do it online for an easy and instant way to track your paychecks.
Limit Your Financial Goals
Something that can complicate any budget is having too many financial goals. Limit yourself to between one and three goals at a time like saving for retirement, or building an emergency fund.
Use percentages for those goals instead of hard dollar amounts. It is simpler to understand that 10 percent of your income is going into a savings account, than trying to save for multiple things at once.
Divide Your Budget into Broad Categories
Divide your budget into broad categories to make it easy to understand. If your expenses and income are not organized, and if you use too narrow categories things can easily become confused.
List everything from your paycheck, to any myLumpsum.com cash for annuity, and things like monthly bills as income instead of subdividing them into smaller categories.
The same should be true with food, utilities and insurance.
Look At Your Budget At Least Once a Week
You might have trouble understanding your budget if you look at it only once every month. This can also make maintaining your budget a complicated chore.
It is better to look at your budget at least once a week for a short time. This helps you to understand what is happening, and what is coming in the next week or month.
Use Technology to Manage Your Budget
Use technology to manage your budget. Several simple apps and productivity programs are available that can make your budget very easy to understand.
You can potentially break down your budget into simple graphs or charts that clearly show your income and spending habits in a single image.
Your budget can be your key to meeting all of your financial goals. Avoid filling your budget with excess information or meaningless numbers. If you stick to a simple plan, then you will have an easier time understanding your budget.Facebook.com/doable.finance