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Understanding a Budget and How to Use It

Few live with it. Many live without it, which is one of the reasons most of us are in debt or living paycheck-to-paycheck. According to a recent article, about one-third of Americans live paycheck-to-paycheck while earning $75,000 or more annually. That’s right, $75,000 or more a year. Ever thought a greater salary or income was equivalent to wealth? Think again. Income Does Not Equal Wealth. But budgeting and managing your finances with wisdom can get you there.

There are a few assumptions surrounding the word “budget”, such as the misconception of being broke, poor, or out of money. However, it may in fact be the opposite. It is simply a financial plan—a forecast for your money. With a financial plan, you will know exactly how much money you have to prioritize your spending. If you want to succeed with your finances, you’ll need a budget. Degrees To Riches has provided a simple budget form to help you start.

This budget form is designed to keep record of your planned spending and the amount you actually spend during the month. You can use this budget form to keep a forecast of your money and control where it goes. Many categories have been included for you such as basic needs, giving, and savings. Blank spaces have been provided for individual customization.

DOWNLOAD BUDGET FORM HERE

Below is a guide to use the budget:
1) Figure out how much money you plan to spend in each category before the month starts.

2) Add your planned expenses and write down the sum to know how much you’ll be spending for the month.

3) Keep track of your spending throughout the month based on your monthly budget form.

4) At the end of the month, review your budget to compare your planned and actual spending amounts.

5) If you have a surplus leftover at the end of the month, apply it to what matters most (paying off debt, giving, or saving).

6) Continue doing this each month, keeping in mind your goals and behavior patterns with money.

Personal finance is 80% behavior and 20% knowledge. The only way to accomplish your money goals is to change your spending and saving behavior.

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About Cha Weatherford

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