How Do You Budget Your Finances?

Feb 11th 2010

Posted By: Mallory Desimone @ 9:14pm In: Financing

FINANCIAL IQ TEST: How Healthy Is Your Budget?

We all have a hard time budgeting. I mean, Let's face it, in these times, it's particularly difficult. It's even harder to stay, or I should say - stick with - the budget we put ourselves on. We require a certain amount of discipline and more importantly, persistence. I know, I know, it sounds impossible, but it turns out IT'S NOT!! When you learn how to budget effectively, it can be very successful when trying to reach certain desired goals. It also gives you a sense of empowerment..You know, you've achieved something that is very hard to do!

I took this test from wisebread.com/financial-iq-test-how-healthy-is-your-budget..

It's sort of a gauge that helps to determine where you are right now and where you need or want to be when it comes to budgeting.

Read over each statement, and answer with a YES, NO, or a NOT SURE. You can see how you did at the bottom of the page. Ok. Let's see if you do better than I DID!

Budget Maintenance

I plan ahead for large expenses like repairs, appliances, or periodic bills.

I amortize annual expenses over 12 months for budgeting purposes (I apply the same principle to other periodic expenses too, for example quarterly expenses are amortized over 3 months).

I record all my expenses (or have an accurate record of expenses through bank statements or the like).

Before I created my budget, I monitored my expenses over a few months to figure out what I spend.

I review my budget regularly for effectiveness and modify as needed.

Savings

My savings plan is an expense that is part of my budget.

Extra money like pay raises, bonuses, and tax refunds go directly into savings or to pay off debt.

Gifts and charitable donations are part of my budget.

Flexibility

If I anticipate that I’ll go over the budget in one category, I find the money from another category that month.

I have financial padding built into my budget for flexibility (and sanity).

I have allowances in my budget for unexpected expenses.

Holiday season festivities and birthday gifts don’t throw me off budget.

Accountability

I know how much money I live on each month/year.

I balance my checkbook so I don’t go into overdraft.

I can account for all my spending.

I live within my means.

I don’t charge anything to my credit card unless I can pay it off in full by the due date.

I pay all my bills on time.

My income is larger than my expenses.

Budget Lifestyle

I don’t allow myself to feel pressured by peers to spend money that I don’t have.

I don’t buy caviar (for example) unless it’s in the budget – even if it is on sale for half price.

I view my budget as a way to figure out what I CAN afford, instead of what I CAN’T.

I have a positive goal or vision to keep in mind (like being debt-free, or having a vacation) for times when the budget is tight or I start to feel deprived.

I budget for small rewards to keep me on track and motivated.

Everybody in the family participates in the budgeting process.

Scoring

I hope you kept track of the YES, NO's, & NOT SURE'S because here's where you tally up the points and find out just how good you truly are at budgeting...

YES = 4 points

NO = 0 points

NOT SURE = 2 points