Creating a plan is good way in reviewing your expenses. It is essential in achieving financial freedom. Sometimes, we often get distracted with the media. They are instilling in your mind that you need this and that, but in reality, you don’t need those material things to live a happy and fulfilled life. Notice how your stock room gets filled by the things don’t need. Try to analyze how much money you saved if you opted not to buy those, the things in your stockroom are stuck money. This is your hard earned money which you used your time, your effort and skills to earn, don’t spend onto useless things.
“If you buy things you don’t need, soon you have to sell things you need. ” – Warren Buffet
Things To Remember When Creating a Budget Plan
Invest on The Healthy Stuff
Stop buying food that will make you sick. Whenever you are in the grocery, always put in consideration the healthy of your family. According to statistics, grocery shoppers tend to buy junk food, candies, and preserved food rather than getting items from the fresh section. Skip the unhealthy items. Buy food that will make you healthier and stronger. The benefits? You will be healthy which means you are avoiding health issues that later will turn into expenses such as doctor bills and prescriptions. And you will save your hard earned money to be added in your savings or investment.
Create an Emergency Fund
Unprecedented can happen anytime. It’s good to be prepared whenever these things happen. If you don’t have emergency funds yet, it’s time for you to have one. This is the first savings plan you should focus on before investing your money. Why? Whenever you need money, let’s say to pay your kid’s tuition or you lose your job, you can have a peace of mind that you and your family will not starve. You don’t have to rely on loans that charge you high interest. I call my emergency funds “Shalom funds”. It means nothing missing, nothing broken and total wholeness in Hebrew. I just thought that if you call it “emergency funds”, it creates an impression that something’s wrong is going to happen. So create your own version.
Allocate Savings for Investment
This step should be taken if you already have your emergency funds. Allocating budget for investment will get you prepared in case an opportunity come knocking at your door. Let’s say your neighbor is selling their house and they need to sell it right away otherwise the bank will foreclose it. They offer you a very good price comparing it to the value of the property. At least you have funds to buy it and include that in your investments. As time goes by, your investments will work for you. You don’t have to work anymore because you got your money working for you. This step is very crucial if your goal is to be financially free.