Thursday , March 21 2019
Home / Looking for Funding? / How To Set Yourself Free From A Strictly Budgeted Life

How To Set Yourself Free From A Strictly Budgeted Life

We know what it feels like to be ashamed and depressed about money. We are here to let you know you can rise above those feelings and live your life the way you want to live it with your finances intact. We created Eling Finance, because it’s our goal to help you break up with the paycheck to paycheck lifestyle, so you can live financially carefree.

If you are reading this article now, we know you decided to find your roadmap to freedom and that is what exactly we would like to deliver. We are a team of regular people who had been in your shoes before and living paycheck to paycheck, struggling to get ahead, and found ourselves terribly not knowing what to do about our debts.

Although we still have those debts now, the difference between then and now is that we have a strategy in place that truly helped us get rid of the loans and credit card debts once and for all. For whatever reason, you still stick to reading until this very portion, is because you are sick and tired of running high fever where you are going to get the money to pay your dues.

How do you create your budget?

Let us start with the first question. What is your income? You need to figure out your net income, not your gross. This is very important to know because if your expenses equal your gross income, then the difference between the net and the gross income could be your debt every year!

The second question. What are your expenses? Consider all of your basic needs, such as shelter, water, gas, electricity, food, transportation, insurance, internet etc. Each of us has different needs, so list down all of your required expenses.

Next, list down all of your wants, such as spa, subscriptions, cell phone, etc. that are not really necessities. I am sure having an iPhone is not a necessity and are totally optional and literally not needed for daily survival.

What are your plans? This is another list that includes wants and needs. For example, we all need an emergency fund so this would be included. Other things to include in your plans would be that dream of going to Tahiti, a new camera, etc.  For the needs, you may consider adding a car maintenance fund, car replacement fund, and/or debt freedom.

Now, taking all of this into consideration, you would create your quick, easy, and simple budget. Add up all of your income and subtract your expenses (include the wants for now).  Two things can happen:  you either end up with a positive number or a negative number.

If you end up with a negative number, you need to do the following:

  • Go through your expense list and add a (W) for wants and (N) for needs.
  • Paying attention to the (W) items, start slashing any optional items and pay attention the amount it will save you per month. For example, cable costs $130.
  • That $130 you just slashed from your budget needs to give you a positive number after adding up all your expenses and subtracting from income.
  • If it doesn’t keep slashing until you get a positive number. You want to slash until you’re able to meet all of your needs (N) without having a negative balance.

If you end up with a positive number, do the following:

  • Give yourself a round of applause.
  • Look at your plans list and determine how to make this surplus work for you. If you are already saving (which I hope you are) you can boost already existing savings goals.  If not, determine a percentage to contribute to your plans that are a need (N) first!
  • For example, if you have no savings — start with building an emergency fund or car maintenance fund. Decide a percentage of this amount to contribute to one or both of these funds.  The remaining amount should go to another need.
  • Other needs may be insurance premiums, car insurance premiums, etc. Once all the (N) plans become funded you will be able to concentrate on those (W) plans.

This is one of the most basic budget strategy you need to use to fall out of debt. If you have a surplus, look back at your expenses and still seek opportunities to slash things you don’t need or could do without for the moment.  Examples are excessive entertainment, a dining out budget that is spiraling out of control, car washes, magazines, warranties, clothing, etc.  This will help accelerate your savings!

Budgets don’t have to be extreme and include every expense under the sun. However, it will give you a basic plan for what to do with your money every month.

Check Also

Where To Get Your Small Business Loan?

That being said, it involves a lot more than simply publishing an application online. The …

Leave a Reply

Your email address will not be published. Required fields are marked *