10 months ago

Better Man

Day 16 Create a Budget

Day 16 Create a Budget With the economy in the tank, it’s more important than ever to tighten our belts and get our finances under control. The most effective tool to do this is the lowly budget. I’ve had an on-again off-again thing with budgets. But when I’ve used them, my financial situation always improved. Of course, what ends up happening is that I get lazy, stop making time to review my budget, and fall back into just sort of winging it with my finances. While I don’t start spending like a high roller, I’ve noticed that when I’m not following a budget, my financial situation stagnates and doesn’t improve. And as men, especially as men taking this 30-Day challenge, we’re all about continual improvement. So today we’ll be creating a budget. Let’s go. The Benefits of Having a Budget 1. Puts you in control. A man is always in control. He’s in charge. But when you don’t have a budget, your money controls you instead of the other way around. You want to be the man with a plan, not the man floating along with his head in the clouds. 2. Reduces stress. If you don’t keep a budget, you’re inevitably going to run into a situation where you don’t have a clue about how much money you have in your account, and you’ll end up incurring some sort of overdraft charge. Not knowing how much money you have at your disposal can create a lot of unneeded stress. You don’t know if you’re check is going to bounce; you don’t know if you’re going to have enough money for the month’s rent; you don’t know how you’ll pay for an emergency if it arises. By having a budget, you can know

30 Days to a better man exactly what’s going in and out and focus on more important things in your life. 3. Increases confidence. There’s something about knowing exactly where your money is going that increases your confidence. I think it has something to do with the feeling of control a budget gives you. Plus, having a budget can help you make decisions faster and more confidently. Instead of hemming and hawing over every single purchase you make, you can just look at your budget, see if you have money available for it, and make your decision. How to Create a Budget 1. Assess your monthly income. Gather your pay stubs together and figure out exactly how much you’re bringing in each month. If you’re self-employed or do work on the side, make a close estimate of how much you earn a month. You need to know how much money you have to work with before you start budgeting it out. 2. List your fixed expenses. Fixed expenses are those that stay about the same each month. There’s usually not much you can do to change the amount you pay on fixed expenses. Fixed expenses can include things like rent or mortgage payments, car insurance, car payments, and health insurance. 3. Subtract your total fixed expenses from your total monthly income. The amount that’s left over is what you can work with for your variable expenses. If your fixed expenses are more than your total monthly income, you’re in trouble. You may need to downgrade to a smaller house or perhaps sell your car and get an old beater so that you have money left over for things like food, gas, and savings. 4. Set a spending goal for variable expenses. Now that you know how much money you have to work with, you can start budgeting for your 98