Now Is A Good Time To Be Living On A Budget

Living on a budget is always smart, but it is a particularly good idea right now.  The facts about the poor economy keep piling up.  I’m not an alarmist and I don’t want to over-sensationalize the economic situation, but I do think we need to face reality.  No one knows for sure, but there could be some very tough financial times ahead.  This may necessitate the need for living on a budget. 

The facts that make budgeting attractive right now

We have enjoyed many years of prosperity, but times may be changing and if they do, then every dollar is going to need to have a job for us to survive financially.  Here is some recent news that is worth noting:

1.  Unemployment is at a 14-year high

In October, 240,000 people lost their jobs and therefore their income.  Most of us think it won’t happen to us, but how long could you survive financially if you lost your job?  Ford recently announced it was cutting 10% of its workforce.  Unemployment has been on the rise all year and it is very likely that this trend will continue for awhile.

2.  Weakest retail sales in 39 years

This October was the weakest in terms of retail sales since 1969.  Many retailers saw as much as a 10% drop in sales with the holidays just around the corner.  Things typically start to pick up in October.  Many feel this indicates we will see slower than normal growth in sales in the 4th Quarter.  Of course, this is the time of year that many retailers make their money. 

3.  The stock market continues to tumble

We usually see a bump in the stock market right after a Presidential election, but not this year.  In fact, in the two days after the election, the markets dropped another 10 percent.  It has been a wild rollercoaster ride lately with stocks and most of us have seen a decline in the value of our investments.  Hopefully, the market will hit the bottom soon and things will start to get better, but it is better to be safe than sorry.

All these indicators point to less than stellar health in the economy.  It is not time to panic, but it is time to take action.

The good news is you can be a financial hero!

At this point, you might ask, “Where’s the good news, Jeff?”  I don’t mean to be a downer.  I’m tired of hearing all the bad news about the economy as much as you are.

However, it is important we face the facts and prepare ourselves.  I’d hate to go on about my business, not say anything, and see people suffer when there are simple steps everyone can take to weather the potential financial storm.

You need to start living on a budget to prepare yourself and your family in the event things get worse before they get better.  This action will help you mitigate the impact of a recession on your family finances.  You will be the hero!

Steps to take to start living on a budget

There are a few simple steps you can take to start getting things under control and ready for what may lay ahead.  It isn’t hard to do these things, but the pay off could be huge.

1.  Fire the old you and hire a budgeting genius

Given the present state of your finances, would you hire yourself to manage your money?  Think of your home as a small business.  Would you hire you to run it? 

If not, then fire your old self and start fresh with a new you.  Now is the perfect time to make some changes and get things in order. 

Sure, there may be some resistance, but there always is when change is necessary.  Be an agent of change, be a leader, be the one that becomes a budgeting genius and saves your family finances!

2.  Train yourself to be a budgeting genius

How much time have you spent learning and training to do your job?  Whether you work for yourself or for someone else, I imagine you have spent a great deal of time becoming the expert you are in your job. 

Now, how much time have you spent learning to manage your personal finances?  Have you trained yourself properly?  Your job generates your income, but what you do with it after you earn it is equally as important.

Fortunately, I recently put together a free list of 79+ Brilliant Budgeting Resources You’ll Love.  This is a great place to start training yourself on how to live on a budget. 

This resource doesn’t just include my advice, although you will find a few of my articles listed.  It has links to articles from a wide-array of personal finance writers.  If you start with it, you will soon discover a wealth of information to help you become the genius you want to be.

3.  Locate some useful budgeting tools

Most people that are serious about budgeting use some kind of software to help them manage their finances.  Personally, I use a package called YNAB Pro.  I wrote a review of YNAB awhile back explaining why I chose it.

Of course, this is not the only software available to help you manage your budget.  There are a lot of others including systems like Mvelopes, Mint.com, PearBudget, Quicken, and even some homegrown systems.  You will find reviews of these  systems in my list of budgeting resources.

I do want to point out that you don’t need to spend a fortune in order to start budgeting your money properly.  This would be completely counterproductive.  A good tool helps, but it doesn’t need to be expensive or complicated.

4.  Just budget it!

Nike says, “Just do it!” and I say, “Just budget it!”  Your budget doesn’t have to be perfect.  It probably won’t be at first.  You will most likely make some mistakes.  You will go over in some areas and under in some others for the first few months.  Don’t let any of this frustrate or deter you.

Budgeting is a learning process.  It will take some time to work out the kinks.  The most important thing you can do is to simply get started. 

Living on a budget is like starting to exercise.  You probably won’t want to do it even though you know it is good for you.  You may even grumble about it and dread it for awhile, but if you just do it, you will wake up one day and realize just how good it makes you feel.  This is financial freedom starting to blossom!

Living on a budget is a very smart move

There is no better time than right now to start your personal finance budget.  The economy is crazy, but for most of us there is still time to get things under control.  I don’t think the worst of the financial crisis has hit home yet, but even if I’m wrong, you will be a lot better off living on a budget.

What has been your experience living with or without a budget?

More articles you might find useful…
How To Avoid Buying Things You Do Not Need!
Things I Learned Living on a Budget – Part 1, Part 2, & Part 3
Snowflaking Will Melt Your Debt And More!
My Back To Basics Series on How To Succeed With Money

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