Diligent hands bring wealth – Proverbs 10:4
I officially started budgeting in July 2017, which has benefited me over the past years. I started with the basics, tracking my income and monthly expenses. In January 2018, I began tracking my credit card debts, mortgage, and student loans.
Tracking my debts was an eye-opener. The student loans was the most surprising. Although I was paying monthly, my student debts had increased by 4% by the end 0f 2018. In contrast, my mortgage was slowly decreasing. I started to hyperventilate and had a mini panic attack. Instead of my debt being reduced, it was increasing. I felt lost but decided I needed a plan.
In 2019, I focused on paying off my credit card debts and figuring out how to utilize them as a tool without paying additional interest for their usage. I also started listing my student loans from the lowest to the highest amount. Once I paid off my credit cards, I started putting all the additional resources I had toward paying off targeted loans.
Later on, I realized I did not have a complete picture of my finances, so I started to track and monitor my assets (savings, retirement, etc.). The budgeting process has been a helpful exercise and has made a big difference in how I view my finances. It has also relieved some of the stress associated with my finances. Since I can track the progress, I have made and plan for ways to strengthen and improve my finances.
Here’s what I have learned by budgeting:
- It provides me a complete picture of my income, debts, and assets.
- I have a greater understanding of how and where I am spending my hard-earned money.
- It allows me to make informed decisions on expenses (i.e., vacations, short trips, giving), investments, and employment choices.
- It enables me to decline unexpected/unplanned expenses.
- I have the opportunity to monitor my financial progress and plan year to year.
- It relieves stress associated with financial worries.
Moving Forward
For 2023, I plan to develop specific goals and strategies for travel, home repair, professional development/experiences expenses. I also plan to create a saving and debt repayment plan.
Tools for Tracking Budget
I am not where I want to be financially. However, with small incremental changes, I will get where I ultimately need to be. I welcome you all on this journey. I want to share a draft budget template I created for my usage. Please download this free template and modify it based on your financial needs.
You can also use other tools (i.e., Mint, Every Dollar Count apps, etc.,) to track and monitor your expenses.