A budget is all about prioritization. As humans, our wants outgrow our haves.
Robert T. Kiyosaki, the author of "Rich Dad Poor Dad" identifies that as the key to success. Leveraging it, he says, can be the engine of our financial independence.
*SCROLL DOWN TO SKIP TO THE FILE ITSELF*
Our income for the next year is usually expected. By checking our accounts once, we can identify our mandatory expenses (property tax, mortgage, loan payments, etc.). It leaves us with that chunk of the cake that should be split between very important expenses, crucial savings, and more.
Keep in mind, that what is a mandatory expense for one, can be questionable for another.
For example, one of my crucial expenses this year will be an expensive flight to visit my grandma abroad.
I'd sell my car to do that and I'd eat less if I had to (it's a big sacrifice. I love food, you know). We are different, our priorities are different, and our budgets are separate - just like our financial goals.
I've heard a funny rumor that suggests that financial planning can take place only by January every year.
WHAT?!
I'm planning from October 1st to September 30th of the following year, only because the first time I planned a budget (over 10 years ago), I started it on October 1st.
So yes, you can start now.
And here is the why. You work so hard for your money. It's a very powerful tool. Let it work for you the way you want. Question every portion of your budget, and set your savings to achieve your goals.
*Numbers are fake, you'll change them in your file according to your personal family finances.
Below you can find the template available for download, the same one I work with myself.
It is simple. It is doable. I'm pretty sure you've read it before in one of my posts: your budget should be as close as possible to reality: extract the actual numbers from your bills. If you have a partner, do that together.
BTW, savings and expenses can sometimes be dealt with simultaneously: paying off your debt, saving for emergency funds, and having a nice time off. To me, being in control is the key.
The template below shows different categories. Those are suggestions. Adjust it to make your budgeting and yearly planning suitable for YOU.
Achieve your goals and don't let emotions or random impulses choose the path for you.
(Alternatively, you can keep a certain amount of your monthly budget to "impulses" "unknowns" and "I want it now". Once you have the budget for impulsive purchases, it allows you to enjoy those, and still keep the expense within boundaries).
Last but not least, I treat the budget as a guideline. I do have a budget per category and a yearly budget that I do NOT EXCEED! How strict you are with each spending category and/or with your monthly financial budget - is up to you. The spectrum is infinite.
Clothing, birthday parties, car oil change - those expenses are not repetitive every month, this is why it's a yearly budget and a monthly guideline. Sometimes I'll choose to reduce the amount spent on takeout - but spend on a new gadget instead.
By the way, all my big annual payments (property tax, Christmas gifts, and such) go to my savings column as sinking funds. I also find it nice to have separate savings account for it in my bank.
Download here:
Oh and.. would you like to know WHY I save? here:
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