Rules. No-one likes rules. But we all know that our streets would be a mess if we didn't follow the rules and stop at red lights. Follow the rules if you want to have a successful personal budget (in this case one simple rule).
Many people think that when making a personal budget, there are a lot of rules to follow. People think that in order for a budget to work, you have to work on it every day and keep track of every penny you spend. People usually think that making a budget is a lot of work.
Most people also think it's hard to make a budget. They think that to make and stick to a personal budget, you have to be able to do math.
Budgets can be a lot of work, but they don't have to be if you follow the First Rule of Making a Personal Budget: Keep it simple. Yes, the KISS rule works for your personal budget, just like it does for a lot of other things in life.
Don't try to make a complicated set of linked spreadsheets with fancy graphs and tables. Don't try to learn how to use the most complicated software for budgeting. Don't think that you have to go to school and study bookkeeping and accounting to make your budget work for you. Keep it simple.
Start with a blank sheet of paper or a blank spreadsheet and write down everything you spend money on every month. That's right, you're not making a budget. Instead, you're making a list.
Most people can't even write down what they spend their money on each month because they don't know what they buy. No problem. Keep it simple. Get a pencil and a piece of paper and bring them everywhere you go. Write down every time you spend money. At the end of a typical week, you will have a good idea of where you spend your money.
Then, you could use the notes you made during the week to make a budget for the month. But if you want to make your budget even easier, make a separate budget for each paycheck or put each paycheck in a separate column on your spreadsheet. That means you should have a column for each week if you get paid every week.
Then, figure out how you will spend each paycheck. It's much easier to figure out how to spend your paycheck for this week than for the next six months.
Read that again: figure out how you will spend your money. Only for this reason should you make a budget. By keeping track of where your money goes, you can make a plan for how you want to spend it.
Your budget will work if you keep things simple. And remember, if you don't follow this simple rule, your personal finances will be a mess, and you might have to file for bankruptcy. So keep things simple, because a good budget is the best way to avoid going bankrupt.
