Budgeting is a necessary step to obtaining financial stability and to
being able to own a business. Take Robert Frimet, for example. Frimet
is a Certified Anti-Money Laundering Specialist, also known as a CAMS,
and he has been helping clients avoid fraud for over 10 years. Over 10
years ago, with his finances in order, he founded RMF Consulting Group, LLC and he is now the president of the business. If Frimet hadn't
prevented overspending, with a budget for example, he wouldn't have
become such a successful businessman.
Budgeting is intimidating if you've never done it, but if you know what you're doing it's easy to get started. These steps will get you on your way to successful budgeting:
Budgeting is intimidating if you've never done it, but if you know what you're doing it's easy to get started. These steps will get you on your way to successful budgeting:
- Record Your Monthly Net Income – If you don't know how much money you have, you won't be able to budget. Identify how much money you have coming in and what you have to spend after social security, taxes and other deductions. This is known as your net income.
- Set Financial Goals – Pick a notebook or spreadsheet to use for your budget and then record your financial goals. Paying off credit card debt, creating emergency savings or paying off your mortgage are examples of financial goals to consider. With your goals in mind, you'll be ready to plan your budget.
- Categorize Your Money – Divide your budget into two categories: variable expenses and fixed expenses. Variable expenses, such as gas money, charity donations and entertainment spending, can change from month to month and they can be cut down if necessary. Fixed expenses on the other hand, such as your mortgage, car payment or phone bill, are the same every month and they cannot be eliminated. Alternately, you can divide your budget into three categories: need, want and savings.
- Create Allowances and Follow the Plan – With your income and your outgoing expenses recorded, you're ready to decide how much money goes where each month. Once you have allotted allowances to your categories, follow your budget at all times in order to prevent over spending.
