3 Budget Tips for Financial Freedom

Money earned can very easily be spent, and usually is. Spending all of your hard earned money may buy you things you want, but all of that spending won't help you if you have a financial emergency. You should budget your money so that you have money leftover for an emergency fund, money for retirement and money for other things as well. See below for budgeting tips to help you gain financial freedom.

Spend Wisely

Just because you have a little bit of extra money after you pay your bills doesn't mean you should spend that little bit of extra money. You shouldn't be spending all of your money so you are left with zero dollars at the end of each and every payday. All you are doing then is leaving yourself with with an empty bank account and living paycheck to paycheck—this is a dangerous gamble and you could be in trouble if you have an emergency.

If you do need to spend, ask yourself if you are spending emotionally, as well as if the item is a need or a want. Put the item back and think about the purchase before just spending that money. If you think about the purchase ahead of time you may not regret the purchase later and may feel better about what you spent your money on.

Divide Up Your Excess Money

The extra money you have leftover should be divided up. If you have credit cards or other debts this money should be divided up and added to these loans to get them paid down faster. If you don't have any loans like this outstanding you should divide the money to different accounts such as into an emergency fund, savings account, retirement fund or college savings account. You should have at least $1,000 in an emergency fund, plus an account with 3–6 months worth of your monthly expenses put away into a savings account. 

Set Goals

As you age you should begin to think about how you will retire. You can't count on social security to live off of, so you'll need to have a backup plan. If you have an IRA or 401K plan through your employer you should definitely enroll and begin putting money in one of these accounts. If your employer doesn't offer this, you should open up your own IRA and start contributing. Set goals and start making them a reality.

If you aren't sure how to begin financial planning you should make an appointment today with a financial planning service for help so you can enjoy financial freedom in your retirement years (or sooner).