208 National Financial Literacy Month Day #2 Budgeting Assists In Navigating Inflation

Welcome to the month of April, National Financial Literacy Month and throughout this month I will be producing podcasts to assist listeners in better understanding the importance of being financially literate. This is not all, budgeting can help you offset the inflationary cycle we are in.

Here is what budgeting is all about and the assumption that everyone knows what budgeting is all about is not true. Here are just a few things to consider as you budget your money and work to navigate inflation.

What is a budget?

A finance plan that allocates future personal income toward expenses, savings, and debt repayment

Benefits of Budgeting:

•Gives you control over your money

•Keeps you focused on your financial goals

•Helps you stay aware of where your money goes

•Helps you save for expected and unexpected costs

•Clarifies areas where you can save money

Three main components of a budget:

Income

Expenses

Savings

Where to start developing a budget

•Understand your money and how you spend it

•Make tough decisions about spending priorities

•Budget with a lifestyle in mind

•Build a budget that allows you to save

Budgeting with a lifestyle in mind

Clarify the life aspects you give priority, and then split them into 3 areas:

•Items that create meaning and bring you joy

•Things you want, but that can wait

•Things you would like to have, but aren’t essential

Things to remember about budgeting

•Make sure your list reflects your priorities

•You can always adjust your goals as your priorities change

•Budgeting takes time, patience, and effort

•If your first attempts don’t go as planned, don’t give up

•Look for ways to make tracking spending easier – like mobile apps

What happens if you don't budget

•Overspending

•Falling into a debt cycle

•Limited spending power

•Limited savings and investments

•Lack of future security

The bottom line

•Budgeting is about saving money

•Better budgeting helps you end up with more money to manage

•An accurate budget brings discipline and order to your finances

•Use your budget to guide important decisions

•Earning more than you spend is the way to a low-stress, comfortable life!

When you embrace and take a consistent and committed approach to budgeting you can offset inflation. How? Change your mindset and relationship with money.  For example, instead of purchasing gas at any gas station, comparison shop for the best places to purchase gas. When it comes to purchasing food, you can also compare different grocery stores to get the best value for your money.

Pay off credit card debt, interest rates are going to be increased six more times in 2022, per the Federal Reserve, so become debt-free and save money in the process. Lastly, the best way to navigate inflation is to develop a spending plan and stick to it.

Discover more about Paul's virtual Financial Fitness course at this link, it is being offered at a 50% discount throughout the month of April, learn more about it at this link:  https://bit.ly/3dbperG