Think you know where your money goes and you don’t need it all written down to keep up with it? I challenge you. Keep track of every penny you spend for one month; and I do mean every penny. You’ll quickly see the need to make a personal budget.
You may be shocked at what all the tiny expenses add up to. Take the total you spent on just one unnecessary item for the month, multiply it by 12 for months in a year and multiply the result by 5 to represent 5 years.
That is how much you could have saved and drawn interest on in just five years. That, my friend, is the very reason all of us need to make a personal budget. If we can get control of the small expenses that really don’t matter to the quality of our lives, we can enjoy better personal finance.
In personal finance budgeting the little things really do count. Cutting what you spend on lunch by two dollars a day on every work day saves you $10 a week - $40 a month - $480 a year - $2400 in five years. That $2400 could have been on your savings account earning interest.
See what I mean? It really is the little things and you still eat lunch every day. That was only one place to save money in your daily living, and you did not have to do without one thing you really need. There are a lot of places to cut expenses if you look for them.
Begin to make a personal budget by setting some specific long term and short term goals. There are no wrong answers here. If it’s important to you, then it’s important, period.
If you want to be able to make a down payment on a house, start a college fund for your kids, buy a sports car, take a vacation to Aruba - anything similar - then that is your goal and your reason to start with personal finance budgeting.
[…] where do you start when planning a cruise holiday? First, what is your budget like? Is your personal budget low? Then here are a few tips for economizing on your cruise […]
Left by Cruise Holidays « xTraveler on February 11th, 2008