create a budget

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Are you interested in creating a budget?

The average family carries a lot of financial stress. Most people have student loans, credit card debt, a mortgage, car loans, and sometimes even other forms of debt.

However, not many people have a budget.

According to a survey done by Gallup, 68% of households in the U.S. do not prepare a budget.

I believe budgets are extremely important and nearly everyone should have one. Rich, poor, middle-class, whatever you are, a budget will likely help improve your financial situation.

Some people think budgets are only for people living paycheck to paycheck, or those with no money.

WRONG!

Budgets are for everyone.

Yes, that means no matter how much money you make, you should probably have a budget. I recently read something that said couples who make $50,000 a month, on average, only save 4% of their income. FOUR PERCENT on a $50,000 monthly income? The majority of that monthly income went towards clothing, food, cars, and homes. I can’t even imagine how someone could blow through so much money each month.

This just proves my point, more people need a budget.

Budgeting may not be the most fun thing in the world, but it needs to be done. Budgeting can help you take control of your financial life, which can help reduce stress and let you reach your dreams.

Other budgeting-related articles you need to read:

Below are my tips on how to make a budget and creating a budget.

The positives of creating a budget.

Budgets help people manage their money better. It’s that simple.

Budgets are great, because they keep you mindful of your income and expenses. With a monthly budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.

Budgets have helped people reach their goals, pay off debt, make more money, retire, and more.

Should a budget be electronic or on a piece of paper?

Everyone has a preference, so this depends on what will work best for you.

Pencil and paper can be great, but an electronic version (such as a spreadsheet, Mint, or Personal Capital) can help you easily make changes.

I suggest choosing whatever you are most comfortable with. It doesn’t matter how you keep your budget; it’s just important that you stick to it.

Side note: I recommend you check out Personal Capital. Personal Capital is similar to Mint.com, but much better. Personal Capital allows you to aggregate your financial accounts to easily see your financial situation. You can connect accounts; such as, your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. And it’s FREE.

You MUST track your income and spending.

What you want is to create a realistic budget. To show you where your money is coming from and where it is going, you need to gather all of your receipts, bank and credit card transactions, and so on.

Or, you could even take it a step further by tracking everything for the next month or two, this way you know you’re not missing any expenses. This means recording every single transaction with a note that tells you exactly what you bought (if a receipt is not itemized). Then, at the end of the month, you can evaluate your spending.

After one month of closely tracking your spending, I’m sure you’ll be shocked by your results. This is the best way to create a realistic budget, as you will truly see where your money is going, and this will help show you how much should be dedicated towards each category in your budget.

Plus, the shock from seeing exactly where your money is going will encourage you to be wiser with your spending.

Budget category: Income.

For the income part of your budget, it can be from varying sources. You can include income from your day job, rental properties, side jobs, passive income sources, and so on.

One common mistake is that many don’t realize their income can drastically fluctuate from month to month, even when you work the same hours every month or if you are paid salary. Due to this, you will want to be mindful of whether you are paid twice a month, every two weeks, once a week, etc. The difference of when you are paid can change the amount you make each month. Budgeting with a fluctuating income can be difficult, and in a future blog post I will go over it in more detail.

Also, I don’t think bonuses should be included in a person’s budget. Including them in your budget is not usually the best thing to do unless you are 100% certain you are receiving the bonus. I have heard of far too many people who have counted on bonuses only to be let down when it was less than anticipated. Your budget should be realistic, not a fairytale.

Related:

Budget category: Expenses.

Have you ever truly totaled your expenses?

When making a budget, many people only estimate their expenses. However, you actually should be taking your realistic expenses and putting them in your budget as your estimations may be way off.

Here are expenses you may include when creating a budget:

  • Home – House payment, rent, maintenance, utilities, insurance, property taxes, etc.
  • Car – This includes all car expenses such as your monthly car payment, gas, maintenance, insurance, license plate fees, and so on.
  • Television, cable, Netflix, Hulu, etc.
  • Cell phone.
  • Internet.
  • Food – This includes all groceries, eating out, snacks, etc. Seriously, sit down one day and add up your food expenses for the month before.
  • Clothing.
  • Entertainment – Entertainment can include many things, such as going to the movies, going out for drinks, concert tickets, sports, and so on.
  • Charity – If you regularly donate to charity, then this should be an area you budget for.
  • Savings funds – This can be for your retirement fund, wedding, travel, etc.
  • Taxes – If you are self-employed, then taxes will make up a  large part of your budget.
  • Health insurance.
  • Miscellaneous – Pet expenses, fees, childcare, school, gifts, etc.

Related posts on creating a budget:

Keep your loved ones involved when creating a budget.

Even if only one person manages the family’s finances, the other person in the relationship should, at least, have somewhat of a clue. Conducting regular family money meetings is crucial to having a successful budget and meeting financial goals.

A budget doesn’t work if the other person doesn’t even know it exists!

Make changes when/if needed when creating a budget.

I recommend going over your budget on a regular basis. This may mean once a week, once a month, or something else. Do what feels right for you and what you think your situation calls for.

Many things can change in your budget. Your income may change, your expenses may change, or your goals may change. When something changes, you should adjust your budget to reflect that.

You may have noticed a recurring theme in this budget post, that you should be realistic about everything. Be realistic about what you make, what you spend, and if things need to be changed.

Do you believe in the power of creating a budget? Why or why not?

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Source: makingsenseofcents.com

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You must identify and understand your money attitude before you can make any financial changes.  Otherwise, you are destined to make the same mistakes time and time again.

There is a say “Attitude is everything.”  I honestly believe that.  Your attitude towards every aspect of your life plays a vital role in how you think and act.  But, did you know that your attitude can also affect the way you handle money?

Your money attitude is often the reason why you spend too much, are in debt or fear your finances.  But, that doesn’t have to mean you can’t make a change.

Changing your financial outlook begins with your money attitude.  If you don’t first get to the root of your problem, you will be destined to make the same mistakes time and time again.

WHAT IS YOUR MONEY ATTITUDE?

There are four different money attitudes with which you may identify. And, it is possible that you fall under more than one. However, when you ask yourself these questions, you should lean more towards one than the other.  Read these below to figure out which one you to which you relate.

You can use a checklist to help you better identify your attitude when it comes to your finances.  They will help you make the changes necessary to take control of your money.

ADORING

If you adore money, it means you love to spend it. In many cases, you buy things (often on credit) just because you enjoy shopping. You don’t worry about the fact that you must pay for it later. You look at the credit card bill and focus only on the minimum payment.

Simply put, you love to spend money. That’s it.

ENTITLED

This attitude can is best described as “keeping up with the Joneses.” However, did you know that in all likelihood, the Joneses are up to their eyeballs in debt? Why would you want to keep up with someone who lives their life that way?

The truth is, the Joneses are showing you what you want to see. For all you know, they fight over money every night. Their kids may resent their parents for pushing them too hard. You can’t judge a book by its cover, so don’t hold yourself to an idea about which you know very little.

AVOIDANCE

If you feel you don’t deserve money, then this money attitude is yours.  It isn’t even just a feeling of not deserving money.  You may also feel anxious or stressed at the mere thought of money.  You don’t handle it well.

Avoidance is one of the most difficult attitudes to change. That doesn’t mean it is impossible. It means that you may have to work a bit harder to make it happen.

CAUTIOUS

You might be careful with your money. Some may call you frugal. Others may call you a miser. Whatever the name, you need to learn to let go once in a while.

This cautious person refuses to spend money.  They are afraid to let it go and fear that it will be gone, never to return. When you are overly cautious with money, you risk opportunities.

CHANGE YOUR MONEY ATTITUDE

Now that you know which attitude you have, now is the time to make changes. It is something only you can do.  No one can do it for you.

IF YOU ARE ADORING

The first step in overcoming your love of money is to cut off its head. That means drastic changes. You should cut up your credit cards. If they prompt you to spend without limit, then this is the first change you need to make.

If you like to spend your free time in the store, you’ll need to find new hobbies. Find something to do with the time you would usually spend walking the aisles hunting for the treasures you believe you need.

The final thing to do is to make a list of everything you love in this life. Don’t leave anything off of your list. Got it? Good. Now, go through the list and cross off everything that does not love you in return. You’ll notice that what remains are the people in your life (and maybe a pet). Those other things? They’re just things. They do not matter.

IF YOU ARE ENTITLED

To start, you have to determine why you feel the need to keep up with them. There could be a reason why you feel this way.

You may hate your job and use these things to compensate.  Low self-worth is another reason you buy items as you want to impress your friends.  It could even be that you had nothing growing up and feel you are due.  You owe it to that poor child.

If you use money to keep up with another individual, take a look at their life and determine what part of it intrigues you. He may have an amazing job that you would love to have; so maybe you should find one that makes you equally as happy.

You are only entitled to be happy and need to look at your life in that way.  Things won’t make you happy.

IF YOU AVOID MONEY

If you don’t feel you deserve money, you need to ask yourself one question: Why not? It could be due to things you’ve done in your past.

Whatever the reason, you need to know that everyone deserves to make money. You need it to survive. You don’t need more than you can handle, but you do need enough to support yourself and your family.

The truth is, avoiding your finances doesn’t make money issues go away. In fact, it makes them worse. For example, if you found a lump on your neck, would you avoid it and hope it went away? No. You’d go to the doctor to figure out what it was, and then do whatever is needed to remove or treat it.

IF YOU ARE CAUTIOUS

When you refuse to spend money, you risk missing out on opportunities. What about that once-in-a-lifetime trip? You could miss the chance to go to dinner to meet the person of your dreams or make a key career connection. You don’t want to live your life with regrets.

I’m not saying to go crazy. I’m telling you that you need to give yourself permission to spend money.

When you set up your budget, just add an item that gives you permission to spend.  It will be OK. I promise.

IS YOUR MONEY ATTITUDE THAT IMPORTANT?

I have heard many people tell me that this really doesn’t matter as it doesn’t have that much bearing on your finances.  The truth is that it can control the way you look at money – even if you aren’t aware of it.

In 2002, when I declared bankruptcy, I never took the time to understand what lead me down that path. Let me rephrase that. I never took the time to understand why I spent so much money and racked up that much debt.   I walked out of the courtroom that day, thinking I’d never make any mistakes with money again.  Boy, did I get that wrong!!

Around 18 months after that happened, I married the love of my life.  We didn’t go crazy spending money, but we did accumulate debt.  Here I was, a couple of years removed from the bankruptcy and debt was building back up again.  Are you kidding me?!?!?

When my husband and I decided that we wanted to work ourselves out of debt, I felt the same way I had years earlier. I came to realize that I simply put a Band-Aid on an open wound when I declared bankruptcy. I never took the time to understand why I did this to myself.

It took a lot of soul searching and understanding, but I figured it out. I had a mix of entitled and adoring attitudes. I never had money growing up.  When I became an adult, I thought I owed my younger self the opportunity to experience these things. This, in turn, led me to adore money.  I loved spending and I loved getting things.

This time around, I did not have debt due to excessive purchases.  However, we had still overspent and were struggling to make ends meet.  When we both committed to making the change, we talked about money and the way it made us felt.

Together, I helped him with his money avoidance, and he helped me with my entitled attitudes.  It’s been more than seven years now that we’ve been debt free.  It has a lot to do with understanding our money attitudes.

CAN YOU REALLY CHANGE YOUR MONEY ATTITUDE?

It will take some time to change the way you look at money and your money attitude. I promise that it won’t happen in one day. It may not even change next week. You may find it’s still the same three months from now.

The point is that you can now recognize your attitude and work with it. You’ll no longer fight your feelings about money. Instead, understanding the way you look at money – and the problems it creates – is a good thing.

Change cannot begin until you know what you need to change.No matter your attitude toward money, there are things that everyone needs to do:

  1. Determine your financial goals. Decide what’s important to you — and only you. Not the Joneses, not your childhood self. Once you know where you want to go, you can create a plan to turn your dreams and goals into reality.
  2. Figure out why you’re being held back. You have to understand why you feel the way you do about money. That allows you to move onto the final step.
  3. Make the changes needed to allow you to move forward. If you don’t change the way you look at money, you’ll never succeed in your financial reboot. You might have the right budget and financial plan, but if you don’t change how you deal with money on a fundamental level, you’ll continue to have financial failures over and over again.

Now that you know your money attitude and are ready to change it, you’re ready to move on to the fun part: the action plan for your budget, your debt, and beyond!

If you want to really take control of your finances, check out the Financial Reboot ebook.  It is a guide to help you not only identify your money attitude but create a budget, control your spending and change your financial future.

Source: pennypinchinmom.com

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Each payday you have great intentions.  You swear that this is the month where you aren’t going to spend too much money. You are going to watch every penny and keep your spending under control.  Before you know it, you can’t even afford to buy groceries.   Is there an answer to your problem?  Yes.  STOP SPENDING MONEY.

Overspending is a problem which affects many people.   Whether you are rich or struggle to make ends meet, you too might find that you spend too much.  Some reasons are financial, and others are emotional.

The first way you can get spending under control is to take a look as to why you are spending too much. That is the first step.  No one can answer this question but you.

After years of helping thousands of readers (just like you), I’ve compiled a list of the top 12 reasons that people overspend.  You might find yourself in one, two or even more!

HOW DO YOU KNOW IF YOU ARE OVERSPENDING?

YOU’VE MAXED OUT YOUR CREDIT CARDS

When there is no room to charge anything on your cards, you might have a problem.  In most cases, maxed credit cards signals you are living beyond your means.  If you have to continue to charge because you don’t have money, then you are spending too much.

YOU CAN’T FIND A HOME FOR YOUR LATEST PURCHASE

Your temptation might be electronics or handbags. No matter what you love to buy, you might notice you are running out of room to store things.  When the stuff takes over your home and is causing clutter, it is time to take a long hard look at how you spend money.

YOUR BUDGET NEVER WORKS

There may be months when you don’t have enough money in your budget to cover your mortgage or food.  When you continually spend money on the wrong things, your budget will not work.

That means if you have just $50 for entertainment, do not spend $75.  That other $25 has to come from another budget line.

YOU SPEND MORE THAN YOU EARN

Take a look at your credit card balances. You might be paying only the minimum balance because you can’t pay it in full. When you spend more than you make and continue to add more debt, take a look at what you are buying.  It might be time to pull back and stay out of the stores.

HOW TO STOP SPENDING SO MUCH MONEY

Now that you can see how you spend your money, the next step is to make a change.  You have to stop throwing it away.  Right now.  Here are the steps to take to control and stop spending money.

1. MAKE A BUDGET

I know, I know.  I probably sound like a broken record as I keep bringing up this budget thing.  However, it’s true. If you do not have a budget, you have no idea where you are spending your money.

A budget is needed so that you can direct your money where to go each time you get paid.  It also helps you know how much you have to available to spend on groceries, clothing, dining out and even entertainment.  When you know you have a limited amount to spend on specific categories, you are instantly in control of our spending.

Read more:  How to Create a Budget (even if you suck at budgeting)

2. PLAN AHEAD

Meal planning is one thing many people don’t think about when it comes to overspending.  If you don’t plan your meals (and stock your fridge and pantry accordingly), you are more likely to run out to eat for dinner. Doing this at $25 a pop 2 or 3 times a week takes its toll on your budget.

Creating a meal plan will not only help you control your spending, but you might also find that you eat (and feel) much better too.

3. USE A SHOPPING LIST

Before you go to the store, it is essential you make a list.  Check your fridge, freezer, and pantry so that you are not purchasing items you do not need – especially produce.

There is so much waste of food that expires before you can consume it.  That results in you buying items so that they can end up right in the trash can.  Make sure you plan your shopping trip and then purchase just what you need, as well as what you can eat before you hit the store the following week.

4. STOP PAYING FOR CONVENIENCE

There is a quick fix for nearly everything.  You can find dinners in boxes, small pre-packaged snacks, etc.  Rather than purchase convenience items, buy the larger size snacks and then re-package yourself into smaller baggies.  You will not only get more out of a box, but you can even control how much you put into each baggie.

There are other ways we pay for convenience.  We pay for someone to iron our shirts, wash our cars and even mow our lawns.  By doing these things ourselves, we can keep much more money and easily stop overspending.

Read more:  How You are Killing Your Grocery Budget

5. STOP USING CREDIT CARDS

We live in an age where our money is all digitally tracked, be it on credit or debit cards.  Yes, they are more convenient, but they make it easy to overspend.  When you use cash, it is impossible to overspend.  You honestly can. Not. Do. It.

I hear all the time that people pay off cards at the end of the month and that they don’t overspend, but that is not the truth for most people.  You might think that it is just $10 a week.  However, that $10 a week is a hit of $520 over the course of a year.  What could you do with an additional $500 in your pocket?

Read more:  How to Create a Workable Cash Budget System

6. PAY YOUR BILLS ON TIME

We all have bills.  We know when they are due.  When you miss the payment due date, you get assessed a late charge.   Pay them on time, so you don’t pay more than you need to.

In addition to late fees, not paying your bills on time can have an adverse effect on your credit score.

Learn how to organize your bills, so you never pay them late again.

7. DO NOT LIVE ABOVE YOUR MEANS

Few of us would not love new clothes or a new car. We all would like to make more money or get the hottest new device.  The thing is, can you afford it?  Is it a want or is it a need?

If you are using credit or loans to get items that you can not afford, then you are living beyond your means and spending money you don’t have.  Scale back and make sure that you can honestly afford the house or the car and that it doesn’t ruin your budget and cost you too much.

Read more: Defining Your Wants vs. Your Needs

8. DON’T FALL FOR IMPULSE BUYS

Stores are sneaky about making us spend money.  They use signs, layout, and even scents to lure you into wanting to buy more.  The thing is, if you purchase something you did not intend to, then you are already blowing your budget and probably overspending.

Another way that you are spending too much is when you plan dinner but then decide at the last minute to go out to dinner instead.  Why do that when you have food waiting for you at home (which you’ve already paid for)?

The final reason you may impulse buy is that of emotion.  If you feel a rush because of that new item, you may purchase out of impulse and emotion instead of need.

Read more:  Stopping Impulse Shopping

9. FIND ANOTHER BOREDOM FILLER

I remember being in an online forum when my kids were little, and we talked about our day.  Many of the mothers went to the store every. Single. Day.  They said they could not handle being in the house and just had to go somewhere.  That resulted in them buying things they did not need.

If you are bored, find a new hobby.  If you just need to get out of the house, why not go for a walk or play a game with the kids?  Find a way to redirect your boredom so you stay out of the store and stop overspending.

10. USE FINANCIAL GOALS

When you do not have financial goals, you have nothing to work towards. You might want to get out of debt, or you may want that newer vehicle.

Take a look at what you are spending each week on non-essential items.  What would happen if you would put that money into savings or paid off your debt instead?  How much closer would you be towards getting that new car or being debt free?

Find a goal you want to achieve.  Talk to your family and see if you have something you can work towards together.  By setting a goal that everyone wants, you will all be more aware of your spending and will contribute towards reaching it more quickly.

11. STOP SPENDING MONEY WHEN YOU TRACK YOUR SHOPPING

I know many people who have tried to use cash, and they say it does not work because they spend it too quickly.  There are others I know who spend too much on plastic each month.  The reason is that they are not tracking what they spend, which is a reason why they overspend.

If you use cash, this is where the envelope system is most helpful.  You will track your spending out of each one so you can see where your money is going.  As the envelope amount gets smaller and smaller, you think twice before you pick up that item — because you may not be able to afford it.

You can do this same thing if you use plastic.  There are all sorts of tracking apps to help you monitor what you are spending on all of your various categories.

No matter how you pay for items, make sure you are always tracking what you spend – you might be shocked to learn where your money goes.

Read more:  Creating and Understanding a Spending Plan

12. DON’T FALL FOR THE SALES

When you walk into the store, pay no mind to the sales.  Use your list and stick to it.  Don’t fall for the fancy sales signs, smells, and flashing lights to lure you into buying something you don’t need.

Read more:  Understanding the Tricks Stores Use to Get You to Spend Money

Before you can gain control of your finances, you need to figure out why you are spending more than you should.  Simple changes to the way you view money can make all the difference.

Source: pennypinchinmom.com

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This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

Zero based budgeting is a process where every dollar that comes in goes to the number one priority.

It’s an effective way of prioritizing your money and executing properly, but it can be hard to know where to start when you are just getting started with this new system.

Budgeting can be a nightmare when you don’t have the mindset and tools to make it easier.

So many people struggle with money- they are overspending on things their family doesn’t need or doesn’t enjoy, which causes stress in their lives. But if your goal is financial freedom, it’s time to learn about a new budgeting system.

If you have a desire to:

  • Spend less than you make
  • Get out of debt
  • Save money faster
  • Become financially independent

Then, you are in the right place! Let how easy and simple zero based budgeting really is!

Decide what you want your budget to achieve: a zero-based budget forces you to think about what you want your money to do, rather than just accepting the status quo.

If you want to use zero based budgeting but aren’t sure where to start, this article will guide you through setting it up in an easy and effective way.

What is zero based budgeting?

Zero based budgeting is a financial planning strategy where every dollar in the budget has a specific purpose. With this type of budget, it can be helpful for those looking to get their finances in order or who want more control over their spending.

A zero based budget is when you start from scratch every month and assign every dollar a job.

Income – Expenses = $0

You begin by calculating your income for the month, then subtracting your known expenses. What’s left is $0, which means you have to get creative with how you’ll spend the rest of your money.

You can use a zero based budget template to help make this process easier.

What are the benefits of using a zero based budget template?

There are many benefits to using a zero based budget template.

Perhaps the most obvious benefit is that it allows you to see where every penny is going. This comprehensive view gives you a clear picture of your expenses and makes it easy to identify areas where you can cut back on spending.

In addition, using a zero based budget helps individuals worry less about their financial health. Since all living expenses are accounted for in the budgeting process, there is no need to panic if an unexpected expense pops up. This peace of mind can be very helpful when trying to stick to long-term financial goals.

A zero based budget template is also easy to follow. The basic plan can be executed without any difficulty, making it a great choice for people who want a simple way to manage their finances.

How to create a zero based budget template?

A zero based budget template can be helpful in tracking your money and achieving financial goals.

There are a variety of ways to create a zero based budgeting template, and no one size fits all approach. That is why we offer a zero based budget template in our shop that you can modify to your needs.

There are a few key things you’ll need to create your zero based budget template. The first is a list of your monthly income, expenses, and savings goals for the year. This will help you stay on track and plan ahead.

The next step is to individually itemize each expense and income. This may be time-consuming but it’s crucial in order to get an accurate picture of where your money is going.

After that, it’s important to track your spending and income on a monthly basis. This will help you see if you’re meeting your goals or not.

It is important to choose the proper zero based budgeting template for your needs.

What are the 5 steps in creating a zero based budget?

There are five steps in creating a zero-based budget. This system was made popular by Dave Ramsey.

We will quickly outline the five steps to make your first zero based budget. Then, we will go into detail on creating your own zero based budget.

  1. List your income
  2. List your expenses
  3. Subtract your income from expenses to reach zero
  4. Track your expenses.
  5. Make a new budget for the next month or pay period.

One way to ensure success by following a zero based budget is by taking small steps instead of making large changes all at once–this can be difficult for some people who are used to living paycheck-to-paycheck.

Another suggestion is to allow yourself some “fun money” so that you don’t feel too restricted while trying to adjust your spending habits.

By following these tips and using a zero based budgeting template, you can successfully get yourself back on track financially!

How to Create a Zero Based Budget

Zero-based budgeting is a system of budgeting that has been gaining in popularity since the introduction of personal computers and spreadsheets. It encourages decision-making based on values and not numbers, which is important in a time when numbers are often used to make decisions.

Zero-based budgeting allows you to start with a clean slate and create your own vision of what the future looks like.

You will need to gather all of your financial information together, including your income, debts, and expenses.

Step # 1: List out your income

The first step in creating a zero based budget is to list out all of your income.

This should include job income, side hustles, rental properties, alimony, child support, and investment income. Once you have a complete picture of your income sources, you can start to make decisions about how to allocate your money.

It is important to decide how you plan to budget your money on a monthly basis, bi-weekly basis, or by paycheck.

Step #2: Tally up your expenses

Be sure to include any regular expenses you have as well, such as rent or mortgage payments, car loans, and credit card bills.

Think of all of the budgeting categories you need for absolutely everything.

This will help you track your spending more closely and make it easier to find areas where you can cut back. Some people recommend creating as many budgeting categories as possible, including for example:

  • Housing
  • Utilities
  • Food
  • Transportation
  • Entertainment
  • Health care

If there’s something that doesn’t fit neatly into a category, come up with a name for it that will help you remember what it is. For example, “clothes” or “misc.”

You’ll also need to factor in any debts you may have.

Step #3: Get your budget to zero

Once you have a full list of your expenses, it’s time to subtract that amount from your income. Then, figure out if you are close to zero.

This is where you will likely have to make adjustments.

There are two ways to get your budget to zero- either spend less than you make (aka cut spending) or make more money.

If you want to stay out of debt and save money, it’s important to do one or both of these things. It may be difficult at first, but with a little bit of effort, you can get your budget under control and start saving for the future.

Budgeting is an extremely important tool to have in your financial arsenal. It allows you to have more control over your money and can help you make more of it. By following a few simple steps, you can get your budget to zero and start saving for the future.

Step # 4: Track your expenses

In order to be successful with a zero based budget, you have to be willing and able to track your expenses. This means being mindful of every penny that goes in and out of your account – ALL month long!

By tracking your expenses, you’re ensuring that every penny goes into the right place. This enables you to see where your money is going and how you can save in specific areas.

Expenses tracking apps allow you to easily record, categorize, and analyze your spending. They let you see how much money you spend on different categories of items from groceries to travel and more. Some of the most popular apps are Simplifi, You Need a Budget, and Qube Money.

This also makes tax season less daunting because you’ll have a complete record of all of your transactions.

You can also use this information to refine a realistic budget that works for you.

Step # 5: Make a new budget for each month or paycheck

Creating a new budget every month is an important part of zero based budgeting. This helps ensure that you are always aware of your current financial situation and can make changes as needed.

It is best to create your budget before the month begins, so you have time to adjust as necessary.

A zero-based budget is a great way to get your finances in order. It can be tough to stick to, but it’s worth it because it forces you to pay attention and make adjustments.

This is why the budget by paycheck method has gained popularity in conjunction with the zero based budgeting system.

Tips to Make Your Zero Based Budget Successful

It can be difficult to stick to a budget, but there are ways to make it happen.

Here are a few quick budgeting tips:

  • Make a list of your necessary expenses and stick to it.
  • Cut back on unnecessary spending.
  • Live within your means.
  • Find cheaper alternatives to your regular expenses.

In addition, here is what you need to make sure your money is spent where you want and not following the status quo.

You need to learn which payment type is best if you are trying to stick to a budget.

Know your End Goal

What do you want your money to do for you?

Too many times, we let life dictate how and where we want to spend money. Then, we are always chasing from behind.

To truly make your money work for you, decide on three core areas you want to spend your money. Then, make your budget reflect those values.

Understand the Flexibility of Zero Based Budget

Zero-based budgeting is a great way to stay flexible with your finances. There are no set rules to follow, and you can adapt as your life changes. The goal is to always be mindful of your spending and make sure that every penny counts.

Unexpected expenses are going to pop up from time to time, so it’s important to have some flexibility in your budget. That way, you can handle these unexpected costs without breaking the bank.

Put Most Important Expenses at the Top

When creating a zero based budget, it is important to start with the most important items and work your way down.

This ensures that you do not miss any essential expenses and that you are able to stick to your budget. It is also important to be realistic about what you can afford and to make sure that you are flexible in case of unexpected expenses.

Put in a Cushion or a Buffer

When starting a zero based budget, it is important to be realistic about what you can and cannot do.

Some people find it helpful to have a cushion in case of unexpected expenses, while others prefer to keep their spending as low as possible. It is important to find what works best for you and stick to it.

Additionally, remember that your goal should be to live within your means, not spend less than you make.

Look Ahead

When creating or following a zero based budget, it is important to be mindful of any upcoming events that may require more money.

This includes things like holidays, birthdays, and special occasions. If you know these events are coming up, you can plan for them in your budget and make sure you have the funds available.

Check out ideas for bill calendar strategies.

Sinking Funds

One of the most important things to remember is that you need to plan for big-ticket items and one-off events. This can be done using sinking funds.

Sinking funds are special savings accounts that are specifically designated for planned expenses.

You put money into the account over time until you have saved enough to cover the expense. This allows you to avoid breaking your budget when something unexpected comes up.

Learn how to use sinking funds.

zero based budgeting Example

Zero based budgeting is a way of organizing your finances in which you spend money only on things that have an actual impact on your financial situation.

This method can help you stay mindful of how much you are spending and where it is going.

It can also help you to make better decisions about what needs to be paid off, saved for, or invested in.

Here is a basic zero based budget example:

Can You Make a Zero-Based Budget With an Irregular Income?

Zero-based budgeting is an excellent way to manage your finances when you have an irregular income.

Regardless of how much money you earn each month, you can create a budget that will help you save money and make the most of your income. With a zero-based budget, every penny has a purpose and you can be sure that you are making the most of your resources.

It is also helpful to “age” your money by at least one month. That means your April income will be paying your May bills.

The Best Zero Based Budget Templates and Apps

Zero-based budgeting is a methodology of budgeting that starts with the assumption that how much one has at the beginning of each period should be used to purchase only those things needed. This is different from the traditional budgeting practice of starting with how much one has at the end of the last period and using that as a basis for what needs to happen during the next period.

There are a number of zero-based budget templates and apps that are available on the internet. The following seven are some of the most popular:

1. Tiller Money

Tiller Money is a budgeting app that allows you to create a zero-based budget. This means that every dollar in your budget has a specific purpose.

It has a “Foundation Template” feature that allows expenses to be budgeted against goals in order to make sure the amount of money actually spent is at a minimum.

This allows you to create a zero based budget quickly and easily.

You can try Tiller Money for free for 30 days, and the annual cost is $79.

2. Simplifi by Quicken

Simplifi by Quicken is a budgeting app that takes a different approach to budgeting.

Rather than starting with your current income and expenses and trying to adjust them, Simplifi starts with your savings goals and works backwards. This can be helpful for those who have trouble sticking to a budget because it allows you to focus on your financial dreams rather than your current spending habits.

You can set up your own categories, limits, watchlist, and spending plan.

It offers all of the features of Quicken with the added convenience of being able to access it on your phone or tablet.

Another thing that makes Simplifi stand out is that it is ad-free (unlike Mint), which can be helpful if you are trying to stay focused while budgeting.

Enjoy your first 30 days free and then pay as low as $3.99 per month.

3. Qube Money

Qube is an app that helps you create intentional, smart spending habits.

With Qube, you have the freedom to manage your money with real purpose. Qube helps you stay on top of your finances by giving you a clear picture of where your money is going and how much you have leftover each month.

Qube Money is a budgeting tool that helps you manage your money by automatically ledger transactions and allowing you to divvy up your money into qubes. This makes it easy for you to see how much money you have in each category and click to spend.

Get started with Basic for free with 10 qubes. Upgrade to Premium for $6.50 per month.

4. YNAB

You Need a Budget (YNAB) is a popular method of budgeting that requires you to spend money from the previous month’s income. They stress “aging your money” to break the living paycheck to paycheck method.

Each month you start from scratch each month, accounting for all of your income and expenses.

YNAB is best known for its awesome support community and training.

It offers a free trial for 34 days, after which it costs $84 per year.

Best Zero-Based Budget Template For Debt Payoff

It is useful to make a debt payoff plan that starts from the zero level. This will allow you to track your progress and adjust your budget as necessary.

Using Tally is a great tool when paying off debt.

Time for you to Start with the 0 Budgeting Method

A zero based budget is a financial planning strategy where every dollar in the budget is assigned a purpose. This differs from traditional budgeting where the focus is on last month’s spending and last year’s income.

With a zero based budget, you start fresh each month and assign every dollar a job or responsibility. This way, you can ensure that your money is being put to its best use.

When you use a zero based budget template, you are able to track every dollar that you spend.

This comprehensive view gives you a clear idea of where your money is going and where you can cut back on spending. Additionally, using a zero based budget template makes it easy to see if there have been any areas where you could save money.

The best part is you are comfortable knowing that all of your living expenses are accounted for.

This means that you can spend money without worrying about jeopardizing your financial health.

Know someone else that needs this, too? Then, please share!!

Source: moneybliss.org

Apache is functioning normally

Do you want to live a great life? Do you feel like your life isn’t going the way you want?

Maybe your plan isn’t working, or you just want a change because anything is better than how things are currently going.

Or, maybe you just want to improve your life even more this year!

No matter how you’re feeling, I believe that everyone is in charge of their own destiny and that everyone can learn how to live a great life.

If you feel things are not going the way you want them to go, then change it! You can improve your life and how you perceive it by taking part in different actions.

For that reason, I’ve packed this post with my best and most actionable tips so that you can live a great life, and there are some new ones that are sure to make this new year your best ever. Enjoy, and I hope this year is a great one for everyone.

Related reads:

How to live a great life in 2023!

1. Reach your goals in 2023.

To make it a great year, you’ll want to set goals so that you can reach your dreams. Those who set goals are much more likely to be successful than those who do not.

To reach your goals, you’ll want to:

  • Review the previous year along with your previous goals and objectives.
  • Make sure your goal is SMART.
  • Write down your goals and objectives.
  • Create a plan to reach your life goals.
  • Break your goal apart into smaller goals.
  • Keep track of your goal setting progress and make changes (if needed).
  • Find small ways to stick to your goal.
  • Find ways to motivate yourself when setting goals.
  • Make reaching your goal a friendly competition.

Read further at The Best Way To Set Goals And Reach Success.

2. Smile more.

Smiling is contagious and is very important if you want to live a great life!

Studies have even proven that smiling can improve your mood, even if it’s a fake smile.

Smile at the next person you pass, smile when you’re talking on the phone, smile when your loved one comes home, smile in an interview, and more.

Related: How To Better Yourself – 23 Challenges That Will Change Your Life

3. Don’t be afraid of what people think.

I used to really care about what other people thought of me, but I’ve been able to let go of that and now I couldn’t be happier. This has really helped me learn how to live a great life.

You shouldn’t let the opinions of others affect you, drag you down, control you, and so on. Like I always say “Who cares!?”

Why should the opinions of others matter to you? And, because everyone is different, all that should matter is what is right for you.

Related content: Learn How To Set Resolutions — Make This Year The Best Yet!

4. Spend less time watching TV.

I bring this up a lot on Making Sense of Cents, but this statistic is just crazy-

the average person watches around 35 hours of TV a week.

35 HOURS!

Our minds are greatly influenced by what we see on TV. Plus, watching TV can be a big time waster and can be detrimental if you want to live a great life.

Instead of turning on the TV the next time you are bored or looking for something to do, you may want to do something more worthwhile, such as working out, spending time with friends and family, reading a book, and so on.

5. Be more confident.

A lack of confidence may:

  • Prevent someone from believing in themselves.
  • Lead to someone being too shy to do what they want or need.
  • Force someone to do things they hate.
  • Cause someone to ruin a meeting, job possibility, and so on.
  • Lead to unhappiness.

On the flip side, confidence can open many doors for you.

It can lead to getting the job you want, making more money, reaching your dreams, meeting new people, networking, traveling the world, and more.

Read more at Be More Confident And Get What You Want In Life.

6. Be thankful for what you have.

The next time something negative is bringing you down, I suggest you try to remember all of the positive and good in your life. You already live a great life, you just need to remember that.

This is the power of positive thinking at its best.

You can be thankful for your family, friends, job, a past experience, opportunities, and more.

Thinking about everything you are thankful for can make something negative seem very trivial. You may even laugh at yourself for being so negative!

7. Start investing.

I want you to start investing if you haven’t done so yet.

You want to invest your money so that you can:

  • Retire one day.
  • Prepare for unexpected events in the future.
  • Allow your money to grow over time.

Read more at The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!

8. Be kind to others.

You should always be kind to others. This can help both you and others live a great life. Being kind can open your mind, help you stop dwelling on negative things in life, brighten someone’s day, and more.

You can be kind to others by doing things such as:

  • Say hello to every person you walk by today.
  • Open doors for others.
  • Smile at strangers.
  • Help someone with their groceries.
  • Volunteer somewhere.

Related post: 50+ Random Acts of Kindness.

9. Look for ways to save more money.

Looking for ways to save more money may allow you to pay off your debt quicker, improve your financial habits, help you reach your dream sooner, and more.

Plus, there are many, many different ways to save money. You don’t need to sacrifice your favorite things or live an unhappy life in order to save money.

It’s all about being realistic and finding a good balance between saving and spending.

Read more at 30+ Ways To Save Money Each Month.

10. Take a risk.

Have you ever thought about doing something particularly risky but were too afraid to go for it?

Well, it may be your year! Or, at least maybe you can start planning to take that risk?

Doing something risky every so often can get your heart beating and your adrenaline rushing. This can really make you feel alive and like you are in charge of your life.

11. Realize that it’s okay to fail.

If you’re taking risks or trying new things, there is a chance that you may fail.

But, that’s completely okay!

You won’t know if something will work or not unless you try it, and sometimes failure is just a part of the learning process.

Part of living a great life is failing every now and then. Accept that fate now and you’ll be better prepared when it happens.

12. Create a budget.

The average family carries a lot of financial stress. Most people have student loans, credit card debt, a mortgage, car loans, and sometimes other forms of debt.

However, not many people have a budget.

In fact, 68% of households in the U.S. do not prepare a budget.

Budgeting can help you take control of your finances, which can then help reduce stress and allow you to reach your dreams. Having a budget is crucial if you want to live a great life.

Read more at The Complete Budgeting Guide: How To Create A Budget That Works.

13. Say yes.

If you often find that you’re hiding from everyone and you feel like you are stuck, you may want to try branching out and saying yes more often.

Saying yes can open you up to more situations, help you grow as a person, and so on.

14. Say no.

If you say yes to everything, but you are ready to pull your hair out, then you may want to start saying no. No one wants to be walked on or spread too thin, and you also don’t want to be holding yourself back from the things that you truly want to do in life.

Saying no may allow you to have more time to focus on what you truly want from life.

15. Don’t let life pass you by.

It can be really easy to let life pass you by. Before you know it, years or even decades may be gone.

Too many people have the mindset of “Oh, in 10 years life will be so much better because of such and such.” And then, they just let their lives go by without ever thinking about the present.

Well, what about now?!

10 years is a long time!

Reaching a goal is great, but you should always make sure you are living life to the fullest (on a budget, of course).

16. Cherish moments with loved ones.

You should never take a moment for granted with those that you love. This will sound very doom and gloom, but you just never know what may happen to you or them.

Plus, spending time with your loved ones is always a great time, so why not just do it more?!

17. Pay off debt.

Paying off your debt can lessen your stress levels, allow you to put more money towards something else (such as retirement), stop paying interest fees, and more.

Debt can hold a person back significantly, and by paying off your debt you may be able to live the life that you’ve always wanted.

Let’s make this the year that we finally get rid of our debt or at least work our way towards eliminating it!

Read more at How To Eliminate Your Debt.

18. Exercise more.

Whenever I’m feeling a little stressed out, tired, or even grumpy, I try to fit in a workout. I know that even a small workout is better than none.

Exercising is great and it can improve your life because it can make you healthier all around. You will feel more confident, your mind will be clearer, you will be able to better cope with stress, and more.

19. Increase your credit score.

If you need a loan for anything in the future, you can do easy things to increase your credit score. Watch your utilization rate on your credit cards, pay your bills on time, watch the amount of hard inquiries on your credit report, and so on.

Your credit score is important because it can affect your interest rate and whether or not you will get approved for a loan.

Just a few percentage points can mean the difference of hundreds of dollars each month.

That means you can wind up saving THOUSANDS each year just by increasing your credit score. You can check your credit score for free with Credit Sesame.

20. Don’t keep up with the Joneses.

Whether you are five years old and want that new toy everyone is playing with, or if you are 50 years old and are feeling the need to upgrade your house, car, etc., everyone has experienced wanting to keep up with someone else.

The problem with this is that keeping up with the Joneses can actually make you broke.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards to (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.

This can then lead to an excessive amount of debt and potentially set someone back years with their financial goals, if not decades.

21. Do what YOU want to do.

What makes you happy, excited, joyful, and motivated? That’s what you should be doing with your life (as long as it’s legal)!

Stop thinking about what other people want you to do and start listening to your heart. Who cares about what others think? If you spend all your time thinking about others, you will just be wasting a ton of time!

  • If you want to live a life of adventure – Go for it.
  • If you want to start a family – Start planning one.
  • If you want a better job – Get one.
  • If you want to change the world – Do it.

22. Read as much as you can.

I’ll admit it, I don’t read as many books as I would like to.

I’m so focused on reading about personal finance, but I know I need to occasionally take a break and do some reading for pleasure.

Reading is great for many reasons, such as:

  • Providing knowledge.
  • Improving your memory.
  • Opening your mind.
  • Bringing out your creative side.
  • It is affordable entertainment.

And more!

23. Think positively.

I say this often, and I believe it.

Thinking positively can greatly improve your life and your outlook on life. Being positive can help motivate you, it can help you to not waste time on regret, and more.

Related article: Why I Believe Being Positive Can Change Your Financial Situation And Your Life.

24. Don’t waste time on being negative.

You are wasting your time when you are being negative.

Instead of wasting your energy on things like dwelling on regret and/or gossiping, you can be more productive by using this time for things that actually matter.

By being more positive, you will be able to better simplify your life.

25. Find free forms of entertainment.

Someone once told me how expensive it was to have fun. They were telling me about all of their debt and everything that goes along with it, then they also told me that their monthly “fun” budget was around $500.

Uhhh what?! $500? A month?!

If you are trying to get rid of high-interest rate debt, I can’t think of any reason for why you should be spending $500 a month to have fun.

There are many ways to have fun for cheap. Check out How To Have Frugal Fun for some of my ideas.

26. Stop letting money control you.

If you want to gain control of your life and make it a great year, then you need to gain control of your money.

This means you need to stop worrying about all of the things that are holding you back. Instead, create an action plan so that the littlest things do not tear you down or stress you out.

27. Get enough sleep each night.

According to the National Sleep Foundation, the average person needs around 7.5 hours of sleep in order to “function at their best.” However, the average person actually only sleeps around 6.5 hours.

Lack of sleep, according to HealthLine, can lead to issues such as:

  • Impaired brain activity
  • Memory problems
  • Moodiness
  • Depression
  • Cold and Flu
  • Type 2 Diabetes
  • Weight gain
  • High blood pressure
  • Heart disease

Due to this, you should aim for 7-8 hours of sleep every night.

28. Find something good in a negative situation.

There may even be some good in a bad experience, even though it can be hard to think about the positive while you are experiencing something negative.

Through the power of positive thinking, you can use a bad experience to learn something new about yourself, to realize you made a mistake, to come up with a new plan you never thought of before, and more.

Taking the negative and turning it into a learning experience can help prevent a negative situation from happening again. Or, maybe next time you’ll be more prepared!

29. Travel to a random place.

There are many wonderful places in the world. Traveling to a random place can help improve your confidence, open you up to new experiences, and may even make you a little uncomfortable- and sometimes that’s okay.

30. Create a bucket list.

If you don’t have a bucket list, I recommend creating one now! In case you are unaware, a bucket list is where you list all of the major goals you want to meet, places you want to visit, and things you want to do in your life.

Creating a bucket list can give you the motivation you need to work harder towards your dreams, it can give you a sense of direction, and a great feeling of fulfillment as you complete each amazing thing you want to do.

31. Welcome the unknown.

Some people like to ignore the unknown because they are afraid of it. However, you’ll never know what your future holds unless you try new things and welcome different experiences.

When looking forward, you should make a realistic plan for what may happen once you start taking steps to reach your goal. This may make the whole thing much more relaxing and less stressful because you will be more prepared for the unknown.

For example, if you want to leave your job for something else but are afraid of what may happen, one thing you might want to do is to make sure you have a well-funded emergency fund. This way, if it takes you a little longer to find your dream job or dream life, your emergency fund will be there to help ease some of the stress.

32. Be open to new things and tackle your fears.

When was the last time you did something new? So many people live inside their comfort zone when they actually need to branch out every now and then.

Yes, stepping outside of your box can be tough, but what if it completely opened your eyes and changed your whole outlook on life? Wouldn’t that be amazing?

If you want to learn how to live life to the fullest, this is something you need to do every now and then. You could even give yourself a goal to try something new each day, each week, or each month.

33. Become more organized.

Being unorganized can waste a significant amount of your time. It leads to late fees, stress, lost items, and more.

Here are some surprising statistics I found from Simply Orderly about being unorganized:

  • The average person spends 12 days per year looking for things they can’t find.
  • Every day, the average office worker spends 1.5 hours looking for things.
  • In a recent survey, 55% of consumers stated they would save anywhere from 16 to 60 minutes a day if they were organized.
  • 23% of people pay bills late and have to pay late fees because they are unable to find their bills.

34. Be open minded to live a great life.

Being open minded is a great quality. There are billions of people in this world and everyone is different, so instead of judging others we should be more open minded.

And, everyone can stand to be a little more open minded.

Being open minded can help you accept changes, love others, be optimistic, learn from others, and most of all, it’s relaxing. Instead of worrying about what everyone else is doing, you can relax, have less stress, and just accept those around you.

35. Finally get rid of cable.

The average monthly cable bill is over $100. The average cable bill is around $200 a month.

You can read more about cutting cable here and how to save money by doing this. I recommend getting a digital antenna so that you can receive local channels for free!

We don’t pay for any form of TV (not even Netflix!), and we LOVE it.

36. Drink more water to live a great life.

According to Lifehacker, the average person should drink around 9 to 13 cups of water per day. This is just a baseline, though, as if you exercise or are in hot weather, then you should consume more.

However, not many people get anywhere near this amount of water.

Drinking water can help you lose weight, perform better, be happier, prevent headaches, help your skin, and is a must for your body to survive.

37. Make more money.

Here on Making Sense of Cents, I spend a lot of time discussing extra income, side hustles, side income, and how to make money online. I believe that earning extra income can completely change your life in a positive way. You can stop living paycheck to paycheck, pay off your debt, and more, all by earning extra money.

In fact, because of extra income and my blog, I was able to pay off $38,000 in student loans within 7 months, I was able to leave my day job in order to pursue my passion, travel full-time, and more!

Related blog posts:

38. Spend less time on social media.

The average person spends many, many hours on social media each week.

Between Pinterest, Facebook, Twitter, Instagram, Snapchat, and many others it can be quite easy to waste your entire day.

If you find that you are spending too much time on social media and that it is negatively impacting you, you may want to shut down the social media accounts that you are spending too much time on. You can even create a time block so you cannot access your accounts during certain periods of the day, and so on.

39. Declutter and downsize.

Decluttering and downsizing can help you:

  • To save money. In some cases, a bigger home can cost more due to higher utility bills, more clutter being bought, higher insurance, more maintenance and repairs needed, higher purchasing price, etc.
  • To have less clutter. The bigger your home, the more likely you’ll have empty rooms that you feel the need to put stuff in. Now that we live in an RV, we are much more mindful of what we buy. We think about every purchase in terms of weight, size, where we can store it, and more.
  • To spend less time on maintenance and repairs. If all other factors between two homes are the same (age, location, etc.), a bigger home is more likely to take up more of your time and money due to more things breaking.
  • To spend less time cleaning. A larger home is going to take a lot more time to clean than a smaller one.

40. Have regular family money meetings.

Talking about money and conducting regular budget meetings is an important task for every family and serious relationship to take part in. A family who has regular money talks and budget meetings is more likely to be financially successful and happier than a family that doesn’t.

Regular money meetings can lead to better communication between family members, a more unified financial goal, family members being more involved and motivated, and more.

Read more at Family Budget Meetings – Yes, You Need To Have Them.

41. Keep a journal.

While I don’t have a journal, I do have this blog, which acts as a journal in a way. Keeping a journal can help you reflect on your past, and it also allows you to see the progress you are making towards your goals and dreams.

Plus, spilling your heart out every so often is great for the mind and soul.

Related tip: If you’re looking for a life planner, I highly recommend checking out Erin Condren and looking at their life planners and monthly planners. This can be a great way to stay motivated so that you can reach your dream life!

42. Don’t be afraid to be successful.

When some people become successful and reach their goals, they occasionally start feeling guilty.

Yes, I know, this might seem weird. However, I understand this.

Sometimes I really dislike telling my friends and family how great life is and how much I love my business. I often feel guilty, but I just need to remember that a mixture of luck and hard work led me to where I am. Everyone has their down points, and I had them as well.

You shouldn’t be afraid to talk about your accomplishments, and you shouldn’t ever be ashamed of your success.

43. Sit silently.

When was the last time you just sat down in complete silence with no distractions? For the average person, this is probably a rare occurrence.

Sitting silently can help you reflect on your life and what’s going on in the world around you. It can also help you relax, destress, and clear your mind.

44. Have an emergency fund.

An emergency fund is something that I believe everyone should have. However, according to a report by Bankrate.com, 26% of Americans have no emergency fund whatsoever.

This same report stated that only 40% of families have enough in savings to cover three months of expenses, with an even lower percentage having the recommended six months worth of savings.

This is frightening to me, as having an emergency fund can really help you get through tough parts of your life.

An emergency fund can help you if you lose your job, if your hours are cut back, if you have an unexpected expense, and so on.

Read more at Everything You Need To Know About Emergency Funds.

45. Stay motivated.

Even with how much I love saving money, every now and then it becomes easy to get unmotivated and want to SPEND ALL THE MONEY!

I’m sure I’m not alone either.

While many choose to live a frugal life, it’s not always easy. Some have large amounts of debt to pay off, others find it hard to stick to a budget, and more.

Finding financial motivators will help you continue to work hard towards your goal, even when it seems impossible. Without motivation, one might give up on a financial goal quite easily. This is why it’s so important to learn how to stay motivated.

Read more at Paying Off Debt And Budgeting: Tricks For Staying Motivated.

46. Stop being afraid of your past.

Just because you may have failed at something in the past, this should not prevent you from aiming for your goals. I know people who have completely given up with reaching for hard goals because they weren’t successful in the past. However, that’s a horrible mindset to have.

If you have failed in the past, then you should use those mistakes as learning tools for the future.

What will you do to live an amazing life? What tips on how to live a great life do you have to share with us?

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Source: makingsenseofcents.com

Apache is functioning normally

Do you feel like you are stuck in a never-ending debt cycle?

Perhaps you keep getting out of debt, only to fall back into it shortly after. That is what a debt cycle is, and many people fall into this cycle and can’t seem to get out.

Falling into debt over and over again can lead to insane amounts of stress, unhappiness, sadness, and feelings of hopelessness. No one wants to experience these feelings.

But, I want to tell you that it IS possible to get out of the debt cycle.

Today, I will help you finally escape the debt cycle so that you can live the life you want.

Face your problem

Before we continue, you need to realize why you keep falling into a debt cycle. You should think about the answers to the questions below:

  • Do you feel like you deserve everything you buy?
  • Are you trying to keep up with the Joneses?
  • Do you have an emotional spending problem?
  • Are you afraid to face how much debt you have?
  • Do you feel like debt makes things seem more affordable?
  • Are you unprepared for emergencies?
  • Do you truly understand how debt and interest rates work?
  • Are you living paycheck to paycheck?
  • Do you live beyond your means?
  • Do you have credit card spending problems?

To get out of a debt cycle, you need to realize why you keep falling into debt. By understanding why you are falling into debt, you can begin to prevent yourself from falling back into a debt cycle.

However, until you dig deep and realize this, the debt cycle will never end.

Side note: I highly recommend that you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com but 100 times better. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. And, it is FREE.

Add up your total debt

This is related to facing your problem, as adding up your total amount of debt will help you realize how to gain control of your debt. This will help you to truly understand how much debt you are dealing with.

Plus, most people have no idea how much debt they have. By adding it up, you will have a more realistic view of your debt problem.

Create a budget

Most people have student loans, credit card debt, a mortgage, car loans, and sometimes many other forms of debt. However, not many people have a budget.

According to a survey done by Gallup, 68% of households in the U.S. do not have a budget.

Budgeting can help you take control of your financial situation so that you can stop the revolving debt cycle.

Read more at The Complete Budgeting Guide: How To Create A Budget That Works.

Pay off debt

In order to get out of the debt cycle, you’ll have to pay off your debt!

No surprise there.

Paying off your debt can lessen your stress levels, allow you to have more money to put towards something else (such as retirement), stop paying interest fees, and more.

Read more at How To Eliminate Your Debt.

Create a vision board

Having your financial goal displayed in front of you can make it that much more real, plus it’s nice to have a constant reminder of what you’re working towards.

Various ways to make your financial goal visual include:

  • Create a graphic that demonstrates your financial goal. I did some research and found a blog post on A Cultivated Nest about many creative ways to do this.
  • Keep a picture of your goal on hand. You could even go all out and create a vision board on Pinterest, or you can create a poster board of all of the things that debt freedom will allow you to do.
  • Write down what debt free life will be like for you.

Start an emergency fund

An emergency fund is something that everyone should have. However, according to a report by Bankrate.com, 26% of Americans have no emergency fund whatsoever. This same report found that only 40% of families have enough in savings to cover three months of expenses, with an even lower percentage having the recommended six months worth of savings.

This is scary to me, as having an emergency fund can greatly help you get through hard and unexpected situations that may arise.

An emergency fund can help if you:

  • Lose your job
  • Have your hours cut back
  • When your car breaks down
  • If you have a medical expense, and so on.

Plus, an emergency fund can help you get out of the revolving debt cycle. This is because if an emergency does arise, you won’t be forced to rely on debt in order to solve your situation. Instead, you’ll have your emergency fund to bail you out!

Read more at Everything You Need To Know About Emergency Funds.

Spend less than you earn

Too many people live paycheck to paycheck. This can lead to credit card debt, high interest rates, and more.

You should always be spending less than you earn. If you aren’t, then you need to find ways to cut your budget and/or increase the amount of money you earn.

Save more money

Finding ways to save more money may allow you to pay off your debt a little faster, improve your financial habits, help you reach your dream sooner, and more.

Read more at 30+ Ways To Save Money Each Month.

Make extra money

I believe that earning extra income can completely change your life in a positive way. You can stop living paycheck to paycheck, pay off your debt, and more, all by earning extra money.

In fact, because of extra income and my blog, I was able to pay off $38,000 in student loans within 7 months, leave my day job in order to pursue my passion, travel full-time, and more!

Making extra money can do something similar for you as well. It can help you break out of the debt cycle as you’ll be able to put more money towards your debt, and you will be able to spend less than you earn.

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Try using just cash

If your problem with debt is that you don’t know how to correctly use credit cards, or credit cards or too tempting for you, then you may want to get rid of your credit cards and try using cash.

A cash budget is when you pay for the majority of your purchases in cash. Of course, there are certain expenses, like a mortgage payment, that you may not be able to do that for or that you may not want to do that for. For the most part, any and almost all spending is done with cash when a person is taking part in a cash budget.

A cash budget can help because:

  • It forces you to think about where your money is going
  • It can prevent impulse shopping and clutter
  • Spending actual cash “hurts” more than spending money with a credit card

Don’t keep up with the Joneses

Whether you are a young child and want that new toy everyone is playing with, or if you are a parent and are feeling the need to upgrade your house, car, etc., everyone has experienced wanting to keep up with someone else.

The problem with this is that keeping up with the Joneses can make you broke and fall into a revolving debt cycle.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards to, in a pretend world, “afford” things. You might even buy things you don’t really care about. The problems can go on and on.

This can then lead to a lot of debt and potentially set your financial goals back years, if not decades.

You should stop caring about what other people are buying, and, instead, only do what makes you happy.

Are you stuck in the revolving debt cycle? What are you doing so that you can get out?

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Source: makingsenseofcents.com