Budget Challenge: Are You Ready?

Are you ready to spring into financial stability by giving yourself a budget challenge to complete and follow? What challenges are you facing currently?

Are you spending too much each week? How do you know how much you should be spending and saving? It is time to dig deep and figure out precisely what is going on with your finances and get things going positively.

How Do You Start Your Budget Challenge?

Thinking about the process of setting a budget can be overwhelming for you, and that is understandable. If you have been spending without planning first, it can seem like a colossal task, but it will be a much more approachable challenge if you sit down and get organized.

There are so many things to look at; it helps to brainstorm and think about financial goals you have for yourself to start. Once you have goals in mind, you can create a game plan and set up your challenge!

Are You Ready For Step One?

Step 1: What Do You Currently Struggle With Financially?

Now that you are focused and ready, it is time to start thinking about what you can change regarding your financial situation.

It can seem like a lot to think about if you do not go into it in an organized way, so here are some things to start with as you organize your budget challenge:

-Make a list of your bills

-Make a list of your weekly expenses

-Make a list of what you can cut out to open up more room in your budget

-gather all of your gift cards and coupons to see where you can save.

-Go over how much income you have coming in and how much you are spending monthly. Are you spending more than you make?

-How much are you saving each month?

Now create your lists so you can move on to step 2!

Step 2: What Are Your Goals?

Are there things you want to do but don’t have the liquidity to do? When you decide on your goals for your spending habits, you can also plan to determine your savings goals.

An emergency fund is crucial for financial safety. If you don’t currently have one or want it to be higher, this is an excellent goal to set for yourself. Even if you only have room to save $5 a paycheck for it, it will grow over time and get to where you want it to if you stick with it and save!

The same thing goes for anything else you need to budget for overtime. Has it been a while since you got away? Start a vacation fund and save a little out of each check so you can finally go!

Try starting your list of goals with three savings goals and three spending reduction goals. Doing this will help you stay organized and will help you achieve what you want with your finances.

Keeping a spreadsheet with your goals to document how you are doing each month is also helpful in keeping up with your budget challenge.

Step 3: Time To Get Started!

Now that you are organized and have a plan, you can get started! Keeping up with your goals can be challenging at first because you will be breaking old habits and developing new ones.

You must work through your old habits as you create new ones and not fall back into old routines. Do you usually stop at Starbucks on the way to work? I love Starbucks too, but does that expensive cup of coffee fit into your new budget? Or can you make coffee at home and put that $5 into your vacation fund?

What else are you spending on weekly? Spending too much on lotto, eating out, ordering in, shopping, etc.? Now that you know what you need to cut out, stay consistent.

Once you reach your new goals, you will be able to set new ones and keep your financial growth going!

Are You Thinking You Can’t Create Your Budget Challenge Because You Have Debt?

You can tackle debt this way as well! Add your debt amounts into your monthly expense list to make sure you pay at least the minimum each month. As you clear out your budget, you will be able to make room in your new payments to overpay your minimus and chunk out your debt.

Depending on your situation, you can also look into debt consolidation or negotiation. There are several ways to approach debt consolidation and negotiation. Keep in mind that if you have debt in collections, you will be able to negotiate out of it and come up with settlements if you choose to.

When you call to speak to the debt collectors, don’t let them bully you into paying then and there. You have negotiation power when it comes to negotiations because, by the time the debt gets to the collection agencies, it has been purchased for less than it was initially worth! Make sure you negotiate for the lowest price, and if it is too much to take care of in one payment, set up a payment plan with the collection agency and add it to your new budget. Like your savings accounts, you can overpay and chunk it out over time.

If you have debt but it isn’t in collections, you can consider debt consolidation by setting up a balance transfer, refinance, or personal loan. The reason to do this rather than keeping the debt on various lines of credit is to save on minimum payments and interest.

Even if you qualify for a higher interest rate, it will still most likely cost you less in interest payments over time because you will have one payment and one interest rate rather than adding up all of your minimum plus interest every month. Always do your calculations first before committing to anything. Also, make sure you can keep up with the monthly payment in your new budget.

It is never too late to start budgeting. Setting up a budget challenge for yourself is a great way to set goals for yourself, so you can push yourself into a better situation and keep you growing from there!

This article was originally appeared on Hello Sensible 

source https://partnersinfire.com/finance/budget-challenge-are-you-ready/

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