Is Your Budget Too Tight

A budget is only restrictive if you don't have any extra cash left over after you pay your bills. Stars and athletes have budgets; they hire accountants to keep track of their money so why shouldn't you keep track of yours? 70% of Americans live paycheck to paycheck and 40% of Americans live above their means. This statistic shows there is a serious problem in America.

A budget frees you from stress, worry and anxiety because you know what you have, what you are spending and have the money available to buy the things you need and occasionally the things you want.

A budget helps keep your finances in balance. When your budget is out of balance you use credit cards, go into debt and this can lead to serious financial problems such as foreclosure, bankruptcy, etc. If you know how much money you earn you should also know how much you spend.

How to Develop a Budget
1. Subtract monthly expenses from your monthly income. If the total is negative or less than 5% of your total monthly income that is a red flag that you need to make some major adjustments to your budget.
2. Track daily, weekly or monthly
3. Keep all your receipts and reconcile your bank accounts
4. Use automated software tool, pen and paper or the envelope method
5. Include some wiggle room.
6. Create short and long term goals
7. Use money left over in budget to create a savings account and pay down debt

How Budgets Can Prepare You for Future Events
1. Is your financial roadmap
2. Helps to deal with unexpected expenses
3. If you work every year and don't have money to take a vacation or get your car repaired or buy a needed pair of shoes because the one you have squeeze when you walk, or don't have enough money to buy health insurance then you need a budget.
4. What you do today will affect your future
5. Can help you plan for the future
6. Frees up cash to achieve financial goals: plan for vacations, home renovations, your children's college education, and plan for retirement

Benefits of a Budget
1. Prevents you from spending more than you have
2. Reduce usage of credit cards
3. Reduces fees (bounced checks, overdraft, over-the-limit, late fee, etc.)
4. Prevents arguments with your spouse or significant other and helps reduce blame
5. Helps you save money when making purchases because you don't have to worry about credit card interest and finance charges
6. Prevents harassing calls from creditors
7. A budget is needed even if you pay your bills on time. The best athletes have personal trainers and coaches to help them remember the best, so if you want to get better with your finances start a budget