More on Creating a Budget

More on Creating a Budget

Photo credited to chodra on morguefile.com.

In researching other blogs on personal finance and budgeting, I came across a blog called Get Rich Slowly. This blog has a lot of great information on managing one’s personal finances. In one article titled “HowDo I Create a Budget?”, Richard Barrington writes about how important it is to find a budgeting system that works for you. Keeping good records is vital to maintaining any budget. This is an area that I struggle with greatly. Barrington stresses that the method you choose is less important than committing to it. My goal will be to find a record-keeping system that I can keep up with and manage. No small task with my ADHD.

Another point he makes is one I made recently about using the income you can count on in your budget. Bonuses are not static and should not be included as part of a person’s regular income. When you receive two paychecks every month for 10 months out of the year, the two paychecks is the amount you should use in your budget. That makes it easier to manage expenses month to month. That is one thing that I have discovered over the years. 

Barrington also mentions that when you find yourself with a surplus, such as those two months when that third paycheck arrives, be smart about how you manage those funds. You should decide ahead of time how that money will be spent. Either add it to savings, put it toward debt, or spend it on something you've been putting off, but make sure you allocate it somehow or you could end up spending more than you intended. That is an important point. I often find that I overspend those funds simply because I did not allocate the funds appropriately ahead of time.

Next Steps:

Continue work on my budget

Get real with the debt