Budgeting 101: Tip 1

Tip 1: Is it Automatic?

In my mind, a budget is never good unless it can run by itself with little to no required input each month. After my budget is set up, I just want it to work. In an effort to reach this perfect state, I advocate setting up automatic bill payments to pay your bills online, automatically, at a scheduled times.

The more that can automate the more worry free –a better the chance for success- your budget will be. However, once your budget is set, you need to ask yourself… “Is my budget really automatic?”

A month after your budget is automated, sit down with your budget and your bank statement and check off each bill. Make certain that you budgeted for every bill. Make sure that every bill got paid.

The perfect budget can be ruined if an expense was not taken into account. Worse yet, perfect credit can be ruined quickly if an expense –whether budgeted for or not- is not getting paid.

I have had this happen where I thought everything was set up properly with the bank, but I mistyped the payment amount and ended up being $100 short of the minimum payment when I thought I was paying extra.

It just goes to show, once your budget is set, check it. Remember the perfect budget runs by itself, but it first needs to run.