While it's true that budgeting is one of the main principles of money management. It cannot always prove to be beneficial for every person, keeping their financial situation in mind. Many people struggle with creating and sticking to a suitable budget due to various reasons. Some reasons are more controllable than others. When outside factors are getting in the way of following their budget, people are more than likely to abandon the whole budget system. But without proper money management, no one can reach financial success. Unless you have a magic spell that can double your money every week or two.
Author and financial realist, Ronnie F. Lee, writes about different money management principles in his latest book, Know Money No Problem, which can help Americans escape living paycheck to paycheck and start their journey towards financial success. With Lee’s guide to wealth acquisition and management, readers can learn how to increase their savings and make their money work for them. Coming from a middle-class family, he worked hard and efficiently to reach financial success. Lee’s story is powerful and inspiring, encouraging readers on their journey. If you are in search of financial success, but having a hard time creating a practicable budget, here a few ways to manage your money beyond budgeting, by Kentin Waits from Wise Bread:
· Artificially Reduce What’s Available to Spend by Paying Yourself First
Skim off or divert 15-20% of your income before the money even hits your checking account. This would be the same as the "savings" column of a traditional budget. Direct the funds to whatever investment vehicles you’ve chosen based upon your level of risk, goals, savings horizon, etc.
· Next, Pay All Fixed Expenses
A portion of the remaining funds is used to pay overhead like mortgage, cell phone, electricity, etc. (according to pay schedule and billing cycles).
· Live on What’s Left
No complex spreadsheets, no rigid guidelines, no robbing Peter to pay Paul. The remainder of your variable expenses gets paid via the balance. Overspending in one area either depletes the rest or becomes a call to boost income quickly. Make an unwavering promise to yourself that padding the process through the use of credit is not an option.
· Save the Rest
Any money that’s leftover gets cycled right back into savings, rather than accumulate for next month. Living within your means is key when it comes to money management.
Granted, this method isn’t for newbies or the faint-of-heart. I think of it as Budgeting 301 after prerequisites like 101 and 201 have been mastered. It accomplishes the same thing as traditional budgeting, but leverages your hard-won discipline and knowledge and allows for more flexibility. Since every dollar isn’t flagged for a purpose, spending can be more fluid.
Comments