The Baby Steps to Creating a Family Budget

Give yourself a present in retirement and plan your financial security well beforehand.  One of the best things you can do in order to prepare yourself for living on a fixed income that goes along with retirement is to establish a budget and spending limit each month and live within that budget.  In fact, you might wish to establish a smaller budget than you actually think you will need in order to maximize the effect and add a little padding to your savings account.

Over time, the little savings can either provide a nice boost to your retirement fund or a great night on the town as an occasional treat.

Living on a budget is one of the most difficult things that many African Americans will ever face.  As a matter of fact we have the nasty tendency to live at the very edge of our abilities and over extend ourselves heartily.  A good method for learning to create and establish a budget is to make a list of all your monthly spending right down to your miscellaneous expenses and convenience store and break room snacks and stops.  Then add up the totals and see where you believe you can cut costs.

Of course it isn’t enough merely to say you want to cut costs in certain areas, you need to create a plan of action for doing so.

If you are creating greater costs by having an afternoon coffee or snack at work see if you can bring them from home in order to cut costs.  Cook one extra casserole per week and freeze it in order to eliminate those last minute fast food runs when you simply don’t feel like cooking.

Take baby steps when it comes to cutting costs and over time you will find that you have learned to live with even less than you thought possible.  In fact you can make it fun by making it a challenge.  See who can eliminate the most money from the budget each week and actually stick to it.

The thing you do not want to do is deprive yourself to the point that you will eventually go out and undo all the good by splurging.  You need to reward yourself along the way for the baby steps you have taken.

Set goals for saving as well as your budget and you will find that you are much better prepared to budget your money if you are confined within that budget.  While you were at it, you just might find that you’ve saved enough to increase your investments enough to bump your budget a good bit when the proper time comes.

You do not have to have an all or nothing approach when you begin learning to manage your money, especially if you are making the effort before you reach the point of retirement.  Little things we do on a daily basis that help us make more responsible decisions about our money will become habits over time.  Those habits will serve you well throughout life and retirement.

And finally the habits we form will keep you on track with your spending throughout your life in order to reach your financial goals.

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