Operating without a budget is akin to getting into a car and driving to a place you've never been before without using a road map. Most people don't establish budgets because they are either scared to face the reality of their spending habits, or think itís too difficult to establish one. Your budget is essentially a guide or a road map for your spending activities. Creating a budget is the most basic step anyone can take towards financial freedom.
If you are like most people, you probably enjoy stopping at your local coffee shop in the morning before getting your day started. Do you realize just how much those daily trips cost? The reality is if you cut your visits in half, you would have a extra money in your pocket at the end of the month. That's extra money that can go towards savings or could be used to pay a bill. Just by making one small change in your daily routine, you theoretically increase your annual income by a couple thousand dollars.
In order for your budget to work, it has to be realistic. You know your spending habits better than anyone else. Take a close look at your daily routine, and try to identify areas where you could possibly cut spending. If you eat out everyday, try bringing your lunch to work. Research has shown that not only is this great for your budget, but itís also good for your health. Meals prepared at home tend to be healthier than food from a fast food restaurant. Other daily or weekly routines that could be scaled back include dry cleaning, impulse buys, magazine subscriptions, and going to the movies. Cutting back some of the activities and adhering to your budget may be uncomfortable at first. However, if your goal is financial freedom or to increase your money management skills, it is incumbent on you to make some changes.
Your budget will only work if you stick with it. Just like dieting, it's going to take hard work and dedication. Budgeting can be fun, especially once you start seeing the results of all of your hard work.
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