I always thought that I was good with finances. I try not to spend too much and I’d splurge on some things here and there, but I was confident I had complete control of my money. What I always avoided though, was seeing my cash flow on paper. As long as I wasn’t in debt, and I was putting a little bit away, I felt like I was doing good. To some extent I guess I was, except I didn’t always know where all my money was going.
Earlier this year I started obsessing over making a budget. I researched personal finance, how to make a budget, etc etc. A few dozen websites later, I was overwhelmed with hundreds of tips, strategies and financial jargon.
I like keeping things simple because complicated steps tend to dissuade me, and I feel like I cannot possibly be the only one who feels this way. So I tried compiling some of the tips and tricks (that works for me) and simplified the steps toward creating a realistic budget. The steps I follow are based on the Credit Counselling Society’s “7 Steps that will help you build a budget that works”. I tried to break the steps down and integrated some tips, tricks and roadblocks I encountered along the way.
STEP ONE: Define Your Financial Goals
“The goals you set are yours; you have the power to choose what is important to you anddesign your goals accordingly. Most people’s money problems occur because they don’tclearly know what they want to do with their money and therefore spend it randomly.”
Often (or at least for me), writing my goals down helps a lot. I like seeing it on paper, and I enjoy crossing them out after achieving them. Here’s how you can write it out: