Budgeting is the process of allocating your money towards different expenses to save for future goals or cover unexpected costs. A budget can help you track your spending, stick to a financial plan, and make more informed choices about where to spend your money.
There are many different ways to approach budgeting, but the most crucial part is finding a system that works for you. Bill Schantz of Mid Atlantic Financial LLC believes that there is no one-size-fits-all solution when it comes to budgeting – what matters most is finding a method that helps you stay on track with your finances.
Creating A Budget That Works For You
The first step in creating a budget is to track your spending. You can do this by recording all of your expenses for a month or by using a budgeting app or spreadsheet. Once you have a clear picture of where your money goes, you can start changing your spending habits.
There are a few different approaches to budgeting, but the essential part is finding a method that suits you.
One popular method that Bill Schantz recommends is the 50/30/20 rule, which suggests that you should divide your income in such a way that 50% of your income is reserved for essentials or your needs, 30% is reserved for non-essentials or your wants, and the remaining 20% goes to debt repayment or savings.
Another approach is the envelope system, which divides your cash into different envelopes labeled with different spending categories. Once the cash in an envelope is gone, you can’t spend any more in that category for the month.
Once you’ve decided on a method, the next step is setting some goals. Ask yourself what you want to achieve with your budget – do you want to save for a rainy day fund, pay off debt, or save for a big purchase? Having specific goals will help you to stay motivated and on track.
Bill Schantz’s Tips For Sticking To Your Budget
Budgeting can be challenging, but you can do a few things to make it easier. First, try to automate your finances as much as possible. Set up automatic transfers into your savings account and direct debits for your bills. This will help you stay on top of your finances and make it less likely that you’ll miss a payment.
Another helpful tip is to give yourself some wiggle room in your budget. If you’re too restrictive with your spending, it can be hard to stick to your plan. Allow for some flexibility to still enjoy your life while staying on track with your finances.
And finally, Bill Schantz recommends that you don’t be too hard on yourself if you slip up – we all make mistakes! Get back on track as soon as possible, and don’t beat yourself up.
Benefits of Budgeting
Budgeting can be tricky. But there are lots of benefits to be had from sticking to a budget, including:
- improved financial health
- reduced stress
- increased savings
- better money management skills
Budgeting can help you control your finances and achieve your financial goals. It’s not always easy, but it’s worth it!
Bill Schantz’s Final Thoughts
As per Bill Schantz, budgeting is a process that can help you to take control of your finances, save for future goals, and reduce stress. There are many different ways to approach budgeting, but the essential part is finding a system that works for you.