Don’t fear a budget, budgeting is power

It’s that time of year when everyone is reviewing their personal finances, often with trepidation. But there’s no reason to be afraid of a budget! Budgeting can be very empowering. After all, it’s your money.

Why budget: Budgeting is foundational

Usually we talk about budgeting with a simple end goal—to spend less and save more. While that’s true, budgeting is worth a try even if your spending patterns are already stable. Knowing your monthly numbers, the average amount you spend and save in a month, gives you perspective and helps you plan to meet your goals.

For example, if you make $5,000 a month and spend about $4,000 a month, and you want a new couch that costs $1,000, you know you can pay for your new furniture in just 30 days. If you want to take a trip that costs $3,500, you know that will take three and a half months to pay for. When you understand exactly what it takes to afford a big purchase, it can be easier to take the plunge. It also gives you the opportunity to consider that purchase. Do you want to spend a whole month of savings on a couch? If you do, then go for it!

Ways to start budgeting

There are a lot of different budgets out there. One of the simplest methods is known as the “50 30 20 Rule.” The Brightfin app allows you to try these simple percentages, understand your monthly numbers, and then adapt them for your lifestyle. Check out the two-week free trial on the App Store.

-----

Using our own app is what enabled me to quit my job and work on Brightfin full time. Because I’d been swiping my expenses on a regular basis, I knew how much I would need to save and how long my savings would last. As I head into a new year focused on this business, I remain confident even as I’ve seen my savings diminish. I know I can keep up with my expenses because I have a plan.

Photo by Heather Ford on Unsplash