How to Make a Realistic Budget

How to Make a Realistic Budget
How to Make a Realistic Budget


Smart Quiz: How to Make a Realistic Budget

  • Planning for Future Raises
  • Looking at Your History
  • Accepting Your Debts
  • Delaying Your Retirement

Correct Answer: Looking at Your History

Many people consider the idea of budgeting about as exciting as going to the dentist; however, budgeting is the golden ticket to financial security, enjoyment of life, stress reduction, and peace-of-mind. In fact, even relationship stress often vanishes when two people agree on a budget that’s both realistic and inspiring. Here’s exactly what you need to know about budgeting.

A Budget Gives You Real Spending Power!

Imagine guilt-free enjoyment to spend the money you’ve budgeted in whatever way you choose. Budgeting isn’t saying only “No.” It’s saying “YES” to the most important things that bring you unforgettable joy, peace-of-mind, and financial health.

What Exactly Is a Budget?

A budget is a living document that you can create on a sheet of paper or computer spreadsheet in about 30 minutes. Your budget will tell you exactly how much income you have and how much you need for expenses each month, while still designing the life you really want. Here’s an example of a real budget below.

Making a Realistic Budget

It’s easy to write a budget that’s based too much on wishful thinking and not enough on reality. Your spending history will often give you the most realistic idea of what you’re really earning and spending on average. Looking at your real income and expenses over at least 3 months will help you budget for your circumstances.

Getting Started:

  1. Use a free budget template to list your average monthly income.
  2. List your average monthly expenses.
  3. Categorize which of your expenses are a “need” or a “want.”

Many people are surprised that they can find room in their budget for what matters most to them, nixing only that which is forgettable, unnecessary, or unimportant. What matters most to you? What adjustments in your budget allow room for the most meaningful spending in your life?

Adjust accordingly. Weighing the wants against the needs and finding what remains to play with as you wish is an invigorating and motivating part of keeping a budget.

Staying Motivated:

Offer yourself a welcome reprieve from saying “yes” to some expenses and “no” to others by listing some financial goals that would be very motivating if achieved. When you look back on your life, what financial choices will you have wished you made? This is where you make room for those. Achieving your financial goals is only a budget away.

What if You’re Still Short?

Don’t be discouraged, there’s a great solution. Add a space in your budget for additional income streams. There are literally dozens of ways for you to turn your spare time into extra income. In fact, never before in history has there been as many rewarding ways for anyone to earn extra money at home, near home, or online… even without any experience. For tips on earning extra money from home, read here.

Room for Adjustments

Leave room to adjust as necessary, especially if you are not only recording past behaviors but also altering the way you spend and acquire money now.

For example, you may set aside X number of dollars in the grocery budget according to the average of past spending in this category. Later, you might adopt a different way of acquiring groceries. You might use more from your personal garden, stack coupons, engage in meal planning, or entertaining more often than you were. Adjust and adjust some more until you find the balance of ease and accuracy.

Stay flexible during the first months of using your budget. Be patient with yourself. Building a budget requires room for adjustments. Once made accurately, a budget hums along, helping you navigate the changes that inevitably occur.

A realistic budget highlights what matters most to you financially, empowering you to use and manage your funds in the most fulfilling ways. Remember that arriving at an accurate budget may require occasional modifying as you gather more real-time data .

Write a simple budget and begin to claim your financial security with less stress, more peace-of-mind and an empowering awareness of being in control of your own money.

~Here’s to Your Financial Health!

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