Today I have a guest post from Rachel Cruze, who is amazing. I may be geeking out a little bit over here. But it’s for good reason. Rachel is awesome, and her recent book, Love Your Life Not Theirs has been an inspiration and guide for my own family finances. Today Rachel is talking about the best way to win with money (she knows what she’s talking about, y’all – read on!).
One of the seven money habits I often talk about is simply “Make a Plan for Your Money.” It’s so basic, but so many people don’t do it on a regular basis.
Another way of saying this—and hang with me here—is you need to make a budget. I know what you’re thinking—budgeting is so boring. I get that. But, honestly, budgeting gets a bad rap.
I’m as much of a free spirit as anyone, so I understand that the thought of sitting down and talking about bills and expenses might sound a little dull. I also understand how a budget might seem very restrictive.
But here’s the dirty little secret about budgeting: Creating a budget will actually help you feel more freedom with your money. A budget actually gives you permission to spend! It’s one of the amazing principles about money I discuss in my new book Love Your Life Not Theirs.
So how is that?
When you know where every dollar is going, you’re prepared. You know what’s coming in and what’s going out. When most people start budgeting, they actually feel like they got a raise. They suddenly “find” money they didn’t realize was there.
One great result is you’ll be able to start spending without guilt. All your money is accounted for, so you don’t have to worry whether or not your bank account will cover your purchase.
No matter what you’ve heard, I promise that making a budget isn’t difficult. First, simply list your monthly household income before the next month begins. Next, list all your monthly expenses. This should include all your bills—mortgage, electric, gas, water, credit cards…everything!
Finally, subtract all your expenses from your income. If you’ve assigned every dollar a name, you should have zero. This is a simple zero-based budget.
When you’re making your budget, I recommend using Every Dollar. It’s the best budgeting app out there today. It will help you make a plan for your money while helping you easily stay on top of your budget throughout the month.
Don’t get discouraged if you mess up a few times. You might need three or four months to get your budget the way you want it.
I promise—once you get this plan in place, you’ll be amazed at how much more in control you feel about your money. More freedom, less anxiety, and a better all-around understanding of your money situation.
So here’s my challenge to you: If you’re not on a monthly budget, give it a try for a few months. I’m betting you’ll see a big difference with your money, and you’ll never go back to a budget-less life again!
About Rachel Cruze
Rachel Cruze is a seasoned communicator and presenter, helping Americans learn the proper ways to handle money and stay out of debt. She co-authored the #1 New York Times best-selling book Smart Money Smart Kids with her dad, Dave Ramsey. Her new book, Love Your Life, Not Theirs, releases October 2016. You can follow Rachel on Twitter and Instagram at @RachelCruze and online at rachelcruze.com, youtube.com/rachelcruze or facebook.com/rachelramseycruze.
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