What if I were to tell you that establishing a budget for your finances has the potential to help you FREE up your hard earned money, rather than restrict your finances? Well it's absolutely true!
Let's step into Laura's shoes for a moment:
Laura is a teenager in high school and earns $300 each month from tutoring students.
She would love to save up for a laptop for when college starts. But she feels like by the time she pays her cell phone bill, puts gas in the car, and grabs a bite to eat - nothing is left over from the money she's made in a month's time.
She decides to look over her spending habits for the past few months, and for the first time she discovers where her money has really been going:
$ 50 Cell Phone
$ 50 Gas
$100 Eating Out
$100 (shoes, magazine subscriptions, manicures and other stuff she didn't realize she was spending money on so often)
Now with a clear picture of how she's been spending her funds, she decides to change up some things so she can create a PLAN FOR HER MONEY...
Laura lives at home where her parents provide all her meals, so she decides to cut back on eating out. She'll still go out with friends to eat, but only a few times a month so sets her eating out budget to $40/month.
She also didn't realize she was still paying for a magazine subscription from a while back, and decides to cancel it. Also, her closet is full of shoes and she does not need anymore, so she makes a cautious effort to stop buying shoes on impulse.
But, Laura loves getting her nails done and decides to get them done 1 time per month which costs her $30 instead of 2 or 3 times month.
After these changes, Laura realizes she freed up $130 for the month, and she plans to spend it by...
Saving $30 for a rainy day
Saving $100 for her laptop
Now Laura's monthly spending looks like this:
$50 Cell Phone
$50 Gas
$40 Eating Out
$30 Manicure
$30 Rainy Day Savings
$100 College Laptop Savings
Laura is still making $300 each month, but now that shes created a plan for where her money goes, she'll have $1,200 at the end of the year to spend on a laptop, and will save $360 for anything else she may need.
I know that most of us who need to budget have more financial responsibilities than our friend Laura here. But her example helps us see how creating a plan for your money through budgeting truly helps free our funds to achieve some of the financial goals we have. We've worked for our money, now we get to see it work for us.
It's your turn, If you would like help creating a plan for your personal or business finances, reach out to me through BreeBooks and we can establish the plan that will help get you to where you want to go!