Creating a budget can only take you so far. Most families focus on creating a budget which creates a lot of stress without renewing their spending plan. Spending is not nearly a bad thing because of how and where you put your money will have different outcomes. Ideally, having a spending strategy can be used to expand a business. As an example, if you are a plumber or have a construction company, a car for an employer is not necessarily a negative expense as long as it produces a positive inflow of cash month after month. As such, the income of the company will increase because the money is well spent on resources that create a positive return.
Even if you work as an employer a spending plan can be used for your own education or you could use the money to rehab real estate deals and increase the value of the property meaning that you are cash flow positive.
It’s a language that can be used to expand or contract your budget situation. A way to expand or increase your income source, even if you have a lot of student debt or in financial stress, would be to spend it on educational material that teaches you a set of skills that other people find valuable and a willing to pay for. The reason I recommend that you take this approach is that you increase your own odds of increasing your own income due to the services or products you be able to provide.
Here are my tips on how to create a budget Simple planing
It’s basically a special designed excel based spreadsheet. But it is well thought out and makes budgeting way easier as you are able to track your expenses with diagrams that adjust accordingly to the information or data you put into the spreadsheet. The excel spreadsheet also helps people who may find it difficult to grasp how their money is spent because the charts are viewable and colors changes, showing if your account is positive or negative.
On Simple Planning, you will find tools such as
Simple accounting software
Profit & Loss planner
Another thing I would consider is to have an emergency fund that can be put to use if you need cash or if you lose your job, of course, this would vary from person to person, but peace of mind comes from options. So, I recommend that you always create opportunities for yourself and the situation you are in.
I would also consider having opportunity cash maybe as high as 15 % of your overall income available, should you find a good deal that could increase your income.
With time you will learn to hedge risk or counterbalance your investment portfolio and business skills as well. It may be hard in the beginning, but progress is the key to learning after all which Is why I recommend that you take one step at a time, one foot after another. I also believe it’s the way you prepare yourself and reduce the stress that comes from taking control of your financial life.