Budgeting is a road map for how you plan to build and sustain wealth. When you go through life spending away without one, you end up squandering more than you might think. Even the most frugal person alive will overspend if she doesn't create a budget. It's definitely foolish to try to run a business without one, but the same applies to your family life. Once you keep this perspective in mind, budgeting will be that much easier, and you'll be motivated to create one and follow it.
Tip #1: Create a Budget
If you're married, then you and your spouse should have meetings, including one dedicated exclusively to writing a family vision statement and setting goals. After your meetings are over with, and the both of you have formulated a financial plan, then you should create the budget. You should also include discussions for a business budget in those meetings, and create one for your business too. Budgeting should be delegated to one person, so that it gets done and there's less room for errors. If you're a single mom, then creating a budget is your sole responsibility, but you can still apply this method.
Tip #2: Create a Frugal Budget
Budgeting may want be your worst nightmare, because it's a reality check on your finances. Even though it's just numbers crunched into a software program or on a spreadsheet, those numbers represent decisions that you have to make about spending. You may hate the idea of making cuts in certain areas of spending, because you'll have to lose something. That's true, but the upside is that you'll be moving towards leaving an inheritance for your children and ensuring your family's well being in the interim. Making a frugal budget is even tougher, but you have to as a work-at-home mom. Your personal finances may fund your business in the beginning, and when the business grows, it will fund you. Either way, you'll benefit from living as frugal as possible and running your business on a tight budget. Look for ways to cut costs, and even eliminate some expenses. It hurts sometimes to live frugal and make sacrifices. Welcome to parenthood.
Tip #3: Include a Get Rid of Debt Category
Your income should be equal to or higher than your expenses. If it's not, then you have to cut your expenses. You can hope that your income levels increase, but you can't really plan for that until it actually happens in business, because you're not relying on a steady paycheck. Allocate some of the money left to a "get rid of debt" expense category. You won't get out of debt until you pay more than the minimum payment due, and until you budget for it, you'll neglect it.
Tip #4: Allocate Some Money to Savings
Some of the money left should also be allocated to savings. If you don't have an emergency fund of at least three months worth of living expenses, then put the money each month that you budget for towards that. After you save up for your "rainy day" fund, consider buying silver coins, and then gold coins. Financial experts agree that it's more like insurance or savings than it is an investment.
Find a budgeting worksheet if you don't plan on using budgeting software. You'll make virtually no mathematical errors, and it will be easy to modify and recalculate as your financial circumstances change.
Daphne Mallory, Esq. is the co-owner of Mallory Writing Services and has written more than 100 articles helping home based business owners and entrepreneurs start and market their business. You can learn more about her here.