I recently purchased Quicken to help me with my new business finances. As I was digging into the program I realized a few things about budgets and how you manage them.
1. RECORD EVERYTHING – When you don’t record the purchases you make, your money can go into a vast dark hole of neverending torment. You run your little debit card willy nilly and then suddenly you look at a pie graph of your purchases and see “I really spent THAT MUCH on groceries last month!” With all the software and debit cards it’s definitely easy to lose track of your daily purchases. Keeping a daily log with you at all times will help you to keep your budget and financial goals in check.
2. Look at the BIG picture – Once a month you need to gather a broad view of your purchases. $1.00 for soda here and there every day can end up looking like a lot of money when you look at as a whole months worth of purchases. Suddenly that $1.00 is $30 a month!
3. Software rules – I don’t know how people survived without direct imports from the bank, and automatic calculations of what you are spending in each category. There are several different options out there. Some are super simple like Daily Home Planner with “cash envelope” type budgeting, and some like my newly purchased Quicken that will help me with customers and invoices. Find the flavor of software that will work for YOU, and that you will actually use, and you’ll be one step closer to having it all together!
4. Finances are important! – The last thing I really realized is that it is really important to be in touch with your finances. Of course I ALWAYS knew this, but with random income I was never super careful about. Like when the person down the street would give me $20 for fixing her computer. I wouldn’t really care about it. I would consider it free money and go buy a DVD. Monitoring EVERY single penny that comes in and goes out though will go a long way to financial freedom.