Budget Fails: The Business of You
Budget fails in the business of you can lead to running by the seat of your pants. That is how paycheck-to-paycheck cycles happen.
Are you always waiting for the subsequent influx of cash and never fully feeling like you caught up?
There are countless methods of tackling a budget, but if you don’t start thinking of your finances like a business, you’re doomed to fall behind month after month!
For most people, running a business sounds like a daunting task. A little known fact is that your personal finances are very much a business – Business of You!
If you are sick of living life for someone else and ready to expand your business of you, then it’s time to start thinking of your finances as a business.
Gather your bills, and long into your depressing accounts, it’s time to start budgeting!
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Recording All Recurring Debts – Business of You Expenses
The first step in getting the Business of You under control is the Budget of You. This critical step is to see where all the cash is going. Gather all of your accounts, bills, or whatever you use to make regular payments and start a list recording every instance of a charge that comes out regularly.
Record every instance of outgoing money as a category such as groceries, gas, entertainment, or other. Breaking down every example of additional charges is also in this step. By understanding where your money is going gives you a picture of how to get the Business of You under control.
Investigate Total Revolving Balances – Business of You Total Debt
Now that you know where your money goes each month, the next step is to find out how much total debt you carry! To do this, log into every account you own that isn’t a subscription, and record the entire remaining balance of every account.
At this point in the budgeting process, there should be a few key columns. You should have your monthly recurring debt in one column, monthly outgoing spending in a second column, and then you should have accounts with total debt owed. It is essential to begin to organize this data, so it isn’t so overwhelming.
Record Instances of Cash Income – The Business of You Revenue
The Business of You isn’t all about spending; it’s also about what you earn. , It is vital to determine what kind of income you are working with to develop a budget that works best! For our next step, In a fourth column, record instances of incoming cash.
Many people work hard for their income, and it may not always be the traditional paycheck. There may be income from multiple people like a married couple or someone who works multiple jobs. The point is to record revenue, and being honest about income is essential as well. If unsure, take the lower numbers. It is better to have extra later than not enough.
Time to Get Analytical – The Business of You Profit and Loss
The Analyze stage of budgeting for the Business of You is a critical component of controlling your finances. For this step, organize your monthly recurring debts by date into the first column. Further, this organization makes the most sense as it helps record in calendars when bills are due.
Analyzing for the Business of You continues as you should have a total amount due each month at the bottom of the first column. The second column should reflect the total income. Simple math, Total debts, minus income = total leftover, whether negative or positive, will tell you a lot about the Business of You!
Time to Take Action
For most people, the Business of You is hemorrhaging money. This next step is to start to cancel every subscription or a monthly bill that you can drop. Don’t watch Hulu? Cancel it. Extra cellphone lines? Cancel them. Every instance where something goes unused, eliminate it from the spending.
Further, it can be challenging to justify the spending; however, a business owner is ruthless, and you are the business owner of your life, don’t let the useless spending get in the way of future investment!
Scruitnize Your Income
As the business owner of your life, income should be scrutinized equally with spending. Evaluate your skills, dedication, and position to determine if it is still a good fit. Additionally, being ruthless with obtaining income is necessary; if a position change isn’t possible, perhaps a side-gig is.
In the Business of You, it is essential to remember that increased income doesn’t mean increased spending. As the gap closes between what you owe monthly and what you make, the next focus needs to be own trimming down total debts owed.
The Important Emergency Fund
In the Business of You, the Emergency Fund, or the contingency fund, is money set aside in case of unforeseen costs. Most Americans can’t come up with a couple of hundred dollars for emergencies. That is why it is vital to set up a fund of at least a few hundred dollars that you keep as a contingency.
You should include this contingency fund in your initial budgeting. Be that ruthless business owner you know you can be! Having this fund supplied with capital will allow you to face circumstances with confidence where before there would be terror.
The Snowball Method – Paying Down Your Previous Budget Fails
The Business of You will significantly benefit from the snowball method. This method takes all debts in order from the lowest amount owed to the highest, regardless of interest rates, and requires payoff using any extra money monthly. Once each debt reaches 0, the minimum payments roll as additional payments on the following lowest debt.
Now there is a fair amount who will disagree with this method, favoring an interest-heavy first approach. However, you should only take an interest first approach if you have a predatory loan or short-term payoff agreement, such as new tires or Rent-A-Center type purchases.
Final Budget Thoughts – Managing Budget Fails: The Business of You
Take control of the Business of You! Budgets don’t have to be complicated. Your life without one is complicated.
Budget fails: the business of you challenges you to take control of your finances.
Running your life like a business and treating your finances as a business owner allows you to take control of your life and finances in a way never thought possible.