Knowing Your Minimum Financial Requirements Can Be Very Helpful
Being acutely aware of your minimum financial requirements is the first step in becoming financially independent.
Pay bills on time and know where your money is going.
That sets up the scenario for further financial successes.
Budget And Track Where You’re Spending Money
When you’re aware of the exact amount you need to meet bills and other necessities, it’s unlikely that you’ll ever fall short.
If you’re married and share the expenses, make sure your spouse is well aware of what your bills are and how you’re going to meet those obligations.
Many couples have run into major trouble by being clueless of financial needs and goals.
You’ll need determination and a good way to track your spending habits if you want to meet the minimum financial obligations.
It’s important to be realistic about your budget if you ever want to get ahead and have money left over to devote to your business and personal goals.
There are various online sites that offer budget strategies and methods to track your spending.
Research and choose one that’s best for you.
Base The Budget On The Reality Of Your Income And Expenses
Ways to customize your plan also exist on the Internet.
You may need to experiment to find which is best for you and which you’d actually use on a day to day basis.
One budgeting strategy is called the 50/30/20 rule.
This method divides your spending into three category percentages.
For example, necessary expenses such as food and shelter account for 50% of your budget.
Unnecessary expenses such as cable and cell phone bills account for 30% while saving for the future, paying down debt and savings for emergencies make up the last 20%.
Don’t Forget To Include Amounts In Your Budget For Emergencies
Or for payments that only happen two or three times per year.
Accuracy about all of your financial obligations is important to make sure there are no surprises.
Another budget strategy you can find more about online is the fixed and variable budget, which divides your expenses into two categories — fixed and variable.
Fixed expenses may include mortgage or car payment and variable would include entertainment and dining out.
The Bare Bones Budget
This may be best for you if you are self-employed or work on commission only basis.
The main part of the budget is the realistic part — which includes survival necessities such as food and shelter.
The other is money you have left over to spend as you wish on things like entertainment, holiday gift giving, and more.
Monitor your situation and change the budget plan to fit as your life progresses.
Originally published at https://forgefinancialfreedom.com on May 13, 2021.