Financial Budgeting, Planning
Many people are very concerned about the state of their finances and they are not really sure where to start to repair the damage or to help a good situation become better.<
Personally instead of talking about budgeting—which in most cases people think about a straight jacket and limited action—I like to talk about a spending plan.
A spending plan alouds you the freedom to CHOOSE what’s important to you. Of course first things first, so in a spending plan too (just like having a budget) first we start with the expenses and bills and the “must” to pay, but we should include some of the things we like and are important to us.
If a financial plan contains only restrictions (Not this, No that) all the time, very soon you become bitter about it. It’s like having a really strict diet, if you are restricted from eating anything you like after a period of time you’ll give up and eat more then before.
There is no quick fix in life; it has to become a lifestyle to eat healthy, to control your spending habit, and to exercise.
I think everybody has to learn to say NO to themselves at different times– self control– you just can’t have everything all the time, even if you can afford it.
So many people are addicted to spending and I tell them to go on a spending fast for 30, 60, 90 days. Don’t spend a penny what is not absolutely necessary. You need to break the habit of uncontrolled spending.
We often shop for entertainment and we buy things to meet an emotional need. Many times people are missing something inside (loving relationship, carrier advancement, parent-kid relationship, forgiveness, peace, financial security, God) and they are trying to fill that emptiness with possession, what really won’t keep us happy in a long run anyways.
We are often lead by our emotions: we eat when we are down, and we over spend just to feel better, or even worst many times we do both at the same time. After a stressful day we head to the mall spend the money we don’t have by charging the plastic and we finish the day with Big-Mac with extra large coke and for a short period of time we feel good. But reality soon will kick in and then its reality check and we start to feel guilty. Have you been on this road over and over your lifetime?? I been and it doesn’t help.
Sometimes you have to suffer for a period of time and you have to develop self control to be able to control your life and your money.
It takes 3 weeks to break a pattern, but it takes only 1 day to fall back, so please if you need help ask someone to help. You may need someone to whom you are accountable with your spending habits.
It takes 40 days to develop a new pattern, so there is a way to everyone who really wants to geo out of debt and learn how to manage money.
If you are around people who are spending like crazy and they have a bad influence on you, you’ll have to make some hard decisions and you have to get away from those who are framing negatively your way of thinking!
After reading this page I want you to believe that you CAN do whatever you have to do to become debt free and financially independent!
It’s time to grow up because there is a price for tomorrow. People live today as if there is no tomorrow, but tomorrow comes and the bills will be in the mail and you have to pay those bills. So learn to make right choices today! Don’t let money control you, take control of your money. The main purpose of a spending plan (or budget) is this: it gives you control of your own money. You actively DECIDE what will be spent, and where your money can best be put to good use.
Spending plan guidelines:
Net Spending Income – NSI – is money available after tax
Housing 38% – this should include: mortgage or rent, taxes, insurance, utilities, phone and maintenance
Transportation 15% – this includes: car payment, auto insurance, license, maintenance, gas and parking
Debt 5% - this is consumer debt, but does NOT include housing or car debt
Savings 10% - save at least 10% of income throughout your working life
Food 15%
Insurance 7% -this would be life insurance, medical insurance (No car and house insurance as those are included already in the housing and transportation)
Clothing 5%
Recreation 5%
These are guidelines to follow when you are planning a spending plan or budget.
If housing, food and transportation is over 70% there is almost impossible to have a budget. In that case you must to have some drastic life changes for a period of time or you must earn additional income. an>
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