Budgeting and Abundance – an unlikely pair but a possible pair. When we think about budgeting, the words that typically come to mind are cutbacks, sacrifices, no extra money, etc. Budgeting is actually a good thing. It’s a practice that allows you to manage your money and not let your money manage you. It doesn’t mean you can’t treat yourself, after all, you work hard for your money, so treat yourself. All budgeting means is that you treat yourself in a responsible way so that you do not put all your other financial goals and future in jeopardy. Let’s have a look at the pros of budgeting:
- In life we play different roles, for example, as a woman, you are a daughter, friend, mother, sister, and boss. Likewise, money has to cover utilities, car payments, entertainment, supermarket, school fees, and savings. That’s a lot. So as you play your different roles in life, and give time to each to strike that balance, you should take a similar approach to your money by budgeting and allocating a different amount to each financial obligation.
- Balance in life is important, so you don’t burn out yourself. Do you agree? Like life, money needs balance so you don’t’ overspend, so you have money left for savings and investing. Saving and investing are important to reach your financial goals. Think about it, how would you buy your home without saving the deposit?
- Small consistent habits over time create a big impact. Understanding how much you spend and what you spend can help you to reallocate your money in a way that is more beneficial for you. By doing so every month, you may be surprised at what the end result looks like.
Ok, now that I have shared some of the benefits of budgeting, let’s talk about the 50/30/20 Rule. A good practice for budgeting is dividng your salary into three portions. Here’s what it looks like
50% or half of your salary should cover your needs. Your needs are all those expenses that you must take care of, such as your mortgage payments, rent, groceries, credit card payments, utilities, school fees, etc.
30% goes to your wants. Wants are expenses that you don’t need but would like, such as eating out, buying clothes and shoes, entertainment, taking a vacation, etc. Think of the things you spend on that you can live without.
20% goes to savings, well in my world investing. If you have been reading my articles you know how I feel about savings vs investing. And the role each of them plays. If you don’t know – then hit me up with an email to Profitjumpstarter.com and I’ll share those important money lessons with you.
Once you master the art of budgeting and investing, treating yourself will become easier and easier
Jump on a call with me if you want to discuss how to implement this budgeting rule in your life.