How to Budget for Greatness

Budgeting for greatness is a simple strategy for building financial security, independence, and wealth. Including goals for saving and investing in your budget plan will lead to greater things. Overspending and debt can limit many people to budgets designed for survival. What can I say? Sometimes, you have to start at the bottom and work your way up! That could be a good thing! Once your debt is under control, and overspending eliminated, you're ready to budget for greatness. Those of you who have been budgeting debt payments have an advantage. You're going have some substantial money freed up when your debts are paid. You've already completed the third and sometimes most difficult step in how to budget for greatness. You've adjusted your lifestyle to allow for those extra funds in your budget. A little re-directing is all that's required.

The first step to budgeting for greatness is to decide what your personal finance goals are. What do you need or want to plan for?
Could it be:

Emergency funding
A wedding
Retirement
College tuition for you or your children
Wealth building

The second step is to determine what amount you will include in your monthly budget. How much will you spend on the goal? Create a regular monthly budget expense for your goals. If you need to meet the goal by a specific date, do the calculations to achieve that goal by the desired date. When building an emergency fund, you can set aside a percentage (say 10%) of your monthly income until you reach the desired amount. Some say that at least the amount of three months current wages is required for a good emergency fund. This is a fund that can carry you through the loss of job, disability, or other serious emergency.

If you don't already have some extra budget funds, you may have to re-invent your budget a little. Enter, step three. Review your current budget, track spending, and cut back or eliminate unnecessary expenses to free up money. If you're not struggling with debt, then this usually isn't too difficult. Tracking spending and making lifestyle changes are well worth the effort when the result could be an improved, no "a great", personal finance picture.

Those of you who have been budgeting to become debt free and have reached your goal, a huge congrats to you! Now it's time to redirect that monthly debt payment money into a plan for personal finance greatness. Why budget for greatness when you can just go shop with all that extra money? Remember, how you got all that debt? Unnecessary spending is usually a major contributor. Faulty budgets are often another factor. You don't want to end up right back where you started. Do you? I don't think so.

Sure, a little celebration is in order. I'll give you that. Maybe, even a reward is in order. So, if you've had your eye on something special but, your budgeting goals haven't allowed for it, go for it. You certainly deserve it! But, don't get carried away! Keep it within reason. Then, redirect that money to the next goal. Becoming financially secure and independent. Prepare yourself for the future, life's events, and emergencies. Build yourself a great wall of protection against credit dependence. That's budgeting for greatness!