Find how to budget, get help doing it and learn the importance of budgeting.
Budgeting is critical to do if you want to not only keep up with your household bill but it is also important if you want to save, invest, and build a stronger financial future for your family. There are many aspects of it. Budgeting includes, but is not limited to, understanding where your income is coming from and expenses are going, it includes the basics of financial literacy (good debt vs. bad debt), the difference between needs and wants and more.
We will go over some of the key reasons to have and follow a budget. You will also find tools and resources that can help you create one. There is also information below on all of the terminology such as income, debt, pre or post tax, income, and much more. All of this is important on the journey to financial stability.
Steps to take and tools to help you budget
There is technology available to help you budget. It is very important to make the budgeting process as easy/seamless as possible. The less effort that people need to put into it, the more likely they are to do it. Luckily there are a number of tools that can help here, ranging from smartphone apps to websites. Most are free to use. Find a list of free budgeting apps for smart phone.
There are also low cost books that families can use. They are affordable so even low income families or the working poor can use them to learn. They cover topics such as how to pay off debt, cover savings, how to build wealth over time, and much more. The books all give some tips on how to budget and go over the terminology. Locate books about money for low income families.
What you spend your money on is part of budgeting as well. Each and every time you make a purchase, or spend a single dollar, it is a good idea to classify the item (or service) being bought as a need or want. This will help you decide whether you should go ahead with the purchase or maybe spend your money somewhere else (or save it). Find the difference between needs and wants.
One of the first steps to take, and maybe the most important, is you need to review your spending and set priorities. Every family needs to understand where their money is going. Find how to review where your spending goes.
Kids, teens, and even elementary school age kids should learn about budgeting and financial literacy in general. The younger they start the better, as it can increase their chances for long term financial stability. There are many apps out there for this, and find steps to teach kids financial literacy using apps.
Budgeting resources for increasing saving and investments
As you budget, you need to plan to start (or increase) your emergency savings. This is not always easy to do, but it is critical. If you are successful it can get you out of the cycle of living paycheck to paycheck, and there are various ways to start to save money as you budget. Find how low income families can build emergency savings.
You can help your kids budgeting and build financial literacy as well. Parents that open a savings account for their kid(s) will be doing them a tremendous favor. Children with accounts are more likely to invest, save money, budget, and several times more likely to go to college. Read more on how to open savings accounts for children.
It can be very difficult for a lower income family to ever retire, even when factoring in social security. Retirees often need to budget their money, and try to increase their income, to make their money last for year after year. There are a number of budgeting tricks and other steps to take to make it through the golden years, and find tips on how to make your money last during retirement.
Low income families can start to invest as well as part of budgeting. There are smartphone apps that round up spending and deposit the cash into investment accounts, technology will help set budgets for retirement savings, help families buy stocks and save money, and more. Find tips on starting to invest with little money, as it is possible.