Let’s Be Realistic…
Everyone wants more money, but not many people know how to find it. And yes, I did just say find it! If you’re waiting on a job promotion to finally feel financially stable, you aren’t doing it right. You’re allowing your finances to rule you instead of taking control and making them work for you. Becoming financially fit is much like getting in shape. It takes effort, a change in life style, and an open mind. However, in the end it should leave you with a similar feeling of self-accomplishment and empowerment.
The key to success is starting off on a solid foundation. AKA a budget! Sounds boring I know, but it’s honestly not as difficult as you might think. Just don’t make it more complicated than it needs to be. So without further ado, here are the four things you need to get a handle on if you want to put together a solid budget.
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Understand Your Income – I’m talking about fixed income. You’ll want to figure out what consistent forms of income you have coming in on a monthly basis. These could be student loans, your paycheck or any help you get from your parents. You’ll need to spend LESS than this.
Understand Your Expenses – Just like your income I’m talking about your fixed expenses. Fixed expenses are ones that do not change from month to month. These include things like rent, car insurance and cable/internet. Since you can always count on them, they need to be the first thing you subtract from your fixed income. Don’t rely on variable income to cover these costs or you’ll be asking for trouble.
Variable Expenses – Budgeting would be WAYYY easier if all expenses were fixed but the reality is expenses like utilities, gas and groceries change from month to month. You’ll want to look at old receipts and bills to estimate what you spend monthly. Be sure to round up when calculating your grand total. It’s better to commit more money than not have enough at the end of the month to buy food.
Be Realistic – As a young adult you are going to drive yourself crazy if you don’t make room for fun. You know going out with friends is inevitable, so plan for it! The worst thing you can do is simply sweep it under the rug. Take a hard look at what you spend on a WEEKLY basis for fun and set aside a portion of your budget for the things that will keep you sane.
List all these items out, add them up and BAM you’ll have a budget. Chances are it won’t be perfect at first, but after a couple months of tweaking you’ll finally get it right. The basic idea is to spend LESS than your income. It sounds easy but, it’s easier said than done. It takes sacrifice and diligence.
If successful, you’ll start building small savings. A savings that could be used to purchase that new car you’ve been drooling over OR it could prevent you from going in debt the next time you have an emergency. Either way, it will help you take control of your finances and start the journey to becoming financially fit. Comment below and stay tuned for our next installment of Getting Financially Fit. Special thanks to MoneyTalksNews.com for the tips!
Until next time,