Budget Rules - 8 Rules For A Winning Budget You'll Love

Success is the sum of small efforts – repeated day in and day out.
Robert Collier

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Aren’t Rules Made To Be Broken?

Not these!

Follow the rules outlined here, and, over time, your budget will have the potential to help you achieve your financial goals!

Budget Rule #1 – Give Every Dollar An Assignment

The concept of giving a task to every dollar you bring in is critical. This is an idea that often gets overlooked by budgeting apps and downloadable spreadsheets. Maybe it stems from a misunderstanding of the idea of “living on less than you make.” I’m not sure. I just know it’s important.

Basically, you want to avoid having money left over at the end of the month without a job to do.

Now that does NOT mean to spend all your money. It just means that any money you don’t spend is being saved for a reason into some sort of sinking fund.

This is about practicality, yes. But, it’s also about mindset. This is your money, and you’re in charge. That means you need to tell it what to do! Every. Single. Dollar.

No more guessing.

Budget Rule #2 – If You Want To Live Without Debt, Make Eliminating Debt First Priority

Not everyone who reads this will make the decision to eliminate debt from their existence. There will be those who still believe they are outsmarting the billion dollar credit card companies who give you ‘rewards’ for your business and know your spending habits better than you ever will. But I digress…

If you ARE going to eliminate debt from your way of life, take care of that first. Want to know why? Just add up all the money you currently send toward debts each month. Now, imagine getting to redirect all of that toward your emergency fund, investments, or sinking funds.

You get it. Knock this stuff out first.

Budget Rule #3 – Build Your Emergency Fund Before Building Any Other Savings

Emergencies happen. But not every emergency needs to become a crisis. That only happens when you find yourself unprepared.

With that in mind, decide how many months of expenses you want to have to fall back on, and build that up before tackling any other savings goals.

This will create an unbelievable sense of security as you move forward. I speak from experience here!

Budget Rule #4 – If You Ever Use Your Emergency Fund, Rebuild It Immediately

Along those same lines, if, at any time, you are forced to use your emergency fund, rebuilt it as soon as the emergency has passed.

This means all other saving stops and everything gets redirected back to this goal.

Remember, this is your security!

Budget Rule #5 – Decide How Much You Want To Invest And Be Consistent

The vast majority of us are not going to stumble into some sort of miracle investment that takes off over night. To those who do, congrats! More power to you! For the rest of us, I have three words:

Slow and steady.

As I mentioned in my article about investing on a budget, investing is a long-term game that pays big in the end. It’s about patience. Investing is not a get rich quick scheme.

To use my previous example, $500 per month placed in decent investments could easily grow to over $1,000,000 over a 30-year career. And you’ll have only put in $180,000!

So, decide on how much you’ll invest and stick to it on a monthly basis.

Budget Rule #6 – Accept The Learning Curve

There is a danger to starting a budget: you might fail and give up.

I’ll let you in on a secret. You WILL fail. That part is okay. Just DON’T give up!

See, it will take time to learn your spending habits. It will take months of trial and error to learn where you can actually make the cuts you want to make effectively.

As you find yourself busting through one category, just look for the money somewhere else in your budget and make the adjustments. It’s okay! Over time, the budget you start the month with will start to look more and more like the budget you end the month with.

Just accept the fact that you will have to make changes and learn the process and don’t give up!

Budget Rule #7 – Give Yourself Permission To Enjoy Spending

What is the point of a budget if not to give yourself the freedom to use your money how you want to?

If you set your budget up responsibly, and structure your savings and investments wisely, you should have money left for the fun things you want to do now. So do them!

It’s okay to spend money, so long as you made a plan to spend it. Some people hear “budget” and think of some sort of financial straight jacket, but really it’s the opposite.

You took care of the necessities, so you don’t have to feel guilty about spending what you’ve budgeted for pleasure! Enjoy!

Budget Rule #8 – Make Your Plan And Stick To It

Finally, and most importantly, once you’ve gotten past that learning curve and have everything in place…

stick to your plan!

That’s it!

If you set your budget up correctly, there is nothing left to do except execute it and enjoy the freedom and security it brings!

Ready to get started?

Remember, regardless of your money goals, you can “Bank on a Budget” to get you from where you are to where you want to be!

If we command our wealth, we shall be rich and free; if our wealth commands us, we are poor indeed.
Edmund Burke

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Alex

Hello, my name is Alex! I'm a public school teacher who has achieved some big financial goals just by getting control of my money using some simple strategies like using a monthly budget. Now I'd like to share what I've learned with you. Welcome to "Bank on a Budget!"