How would you like to gain complete control of your money? It is possible, but it all starts with a plan. Watch this brief video below that will introduce you to a family that realized that having a plan is the only way to know where your money is going.
After watching the video, be sure to read the second key to budgeting…Balance It!
#2 Balance it. This is what financial professionals would call this a “zero-based budget”. You take your total net income (take home pay) for the month and subtract out every expense you are going to have that month. When you subtract those two numbers, it needs to equal zero. Each month when you do a brand new budget it will not balance the first pass through. You will have one of two scenarios. You will either have money left over or you will not have enough money for your expenses.
If you have extra money left over do not stop there. Think about it. Have you ever received extra money, spent it and then wonder where it went. You do not want to have “extra money” floating around. I recommend using your extra money to go towards whatever baby step you are on.
If you have more expenses than income, then you need to go back to your budget and reduce or eliminated some expenses that month.
I have had a lot of people share with me that using this equation has really helped them better understand what a want vs. a need is.