Monday, July 23, 2012

Monthly Budget Planning in 6 Easy Steps - Step 3

It's important to know how much money is coming in, going out and where it's going.  It's also very important to have goals.  We need to ask the five W questions Who? What? Where? When? Why? and How? so we can set clear goals.  Answering the questions will turn the dream or thought into an accountable and attainable goal.  The efforts to reaching a goal must be track-able.

Who:  Who is responsible for each task
What: What is the path, What will get paid off first
Where: Where will the savings go
When: When is the deadline or date
Why:  Why save money
How:  How is each task going to be accomplished

The THIRD step is to look at your goals.

  • Budgets that have short or long-term goals are most effective.  For example, a short-term goal might be to eat out once a month without using a credit card or taking money away from the bills.  Or, a long-term goal might be to take a vacation and pay cash.
  • Start slowly with monthly short-term goals that are easily attained to build confidence and test your methods.
    • Some suggestions for being able to eat out once a month without using a credit card are to:
      • Take your lunch instead of eating out
      • Use coupons on items you regularly purchase and try to get them while on sale
      • Pay yourself $5 or even $1 each day and place it in your "Goal" jar
      • Save your change at the end of every day
  • Once you've mastered your smaller or short-term goals, start thinking long-term: Vacation, New Car, House, Patio Furniture.

How did you get out of debt?  Have you ever used a "Vacation" jar or other "Goal" jar?

Please write us at substanceofliving @ gmail(dot)com if you'd like some help setting your goals or if we can be your cheerleaders.

P.S., Please seek a financial adviser for in-depth analysis of your particular situation.  We are not financial advisers but have been in similar situations and want to pass along our experiences.

Please share me with your friends! Please forward this post to your friends or better yet share on Facebook, Twitter, and Google+.  THANKS!  Your comments and help in spreading the news about this site is ALWAYS appreciated!  Be sure to sign up to receive future articles delivered directly to your inbox.