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How to Manage a Personal Budget

March 1st, 2011

personal-budget-finance.jpgCommitting a personal monthly budget to paper is a huge step towards gaining control of your financial situation. There is a great deal of work that goes into creating a comprehensive and useful budget, but once you start using it you may begin to encounter challenges.

Regardless of how well you plan and how detailed your budget is, it is inevitable that circumstances will arise which could derail your program. The best way to insure that you remain true to your budget and stay on the path to controlling your personal finances is to learn how to manage a budget once you have created it. A budget cannot be a static plan. Preparing yourself to handle the challenges of a budget can help you to stay within your spending rules.

Get a Hobby

In the early going of any budget, you will find yourself rebelling against your own ideas. Some of the budget numbers you created seemed fine on paper, but once you put them into action it becomes difficult to maintain them. This is because a budget forces you to alter your spending habits. It is akin to quitting smoking or caffeine. It can be extremely difficult at first.

To help you adjust to your budget and fight old spending urges during the first few months, you should take up a hobby. Purchase an inexpensive guitar or keyboard and learn to play. Sign up for a free blog website and start writing about your favorite topics while building an audience. You might even be able to make extra money with your hobbies if you work hard enough at them. You may become good enough at your instrument to start playing for paying work, or your blog may become popular enough to generate revenue through online marketing programs. A hobby will take your mind off of the things you used to spend money on, and help you focus on something creative and potentially lucrative.

Keep Planning

Developing your budget requires planning, but your planning days are not over once your budget is completed. If you find yourself facing an emergency auto repair that you do not have the savings to cover, then you need to start planning for how to take care of it. It may be necessary to get a personal loan to cover the expenses, and then you would need to work the personal loan payments into your budget.

If you are paid bi-weekly, then there will be months where you will get three paychecks instead of two. You need to make plans for that third paycheck and alter your monthly budget accordingly. Your budget numbers are goals to shoot for but in order to keep up with the challenges that life can throw at you, it is necessary to work constantly with your budget to make sure you stay within your financial plan.

Attention to Detail

When you pay a bill or spend money on an expense, make sure you deduct that from your budget. One of the hardest parts of the early stages of a budget is keeping the attention to detail that is necessary to actually maintain it. Force yourself to make the necessary changes each time you pay a bill or get a paycheck and, over time, that attention to detail will become habit.

It is not enough to create a budget and then try to work with it each month. Your financial situation is more dynamic than you realize, and you need to learn to manage your budget in order for it to remain a useful tool in helping you control your personal finances.


This article on personal budgeting was supplied by George N. Root III from Constant Content.


One Response to “How to Manage a Personal Budget”

  1. comment number 1 by: Personal Finance Budgeting

    Although personal finance includes variety of concepts, it starts with a simple tool – personal finance budgeting. If you have a requisite budget, you don’t have to worry about your funds, it’s all safe.

    Instead of going deeper into the significance of personal finance budgeting, let’s start with how to go about. Here are 5 steps in budgeting that I would like to share it with you.

    1. Analyze your Expenses and Income
    2. Break Your Expenses into Categories
    3. Set Your Goals
    4. Set a Path
    5. Execution and Consistency

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