Budgeting is important for every person and institution. Without proper budgeting expenses can go up and financial matters can go out of control. In budgeting, there are three basic factors that need to be looked at:
• Controlling day-to-day financial expenses
• Following your long term financial goals
• Creating a financial safety net to protect against financial disasters
For military personnel and veterans, this is one of the most important steps in staying on the top after coming out of active service. Integrating into the workforce is one of the things veterans will have to face when they come out of active duty. Hence, having a proper budgeting plan will help staying financially sound. Here’s how budgeting can help.
What is Budgeting?
Budgeting is not about doing something when you are short on cash. Budgeting is not something you do when you are going through a major transition in your life. In fact budgeting is something that both the rich and the poor need if they want to make it through life. Every person needs a budget to control their financial affairs. Budgeting is a means through which you can achieve financial success. It is about making your money work for you instead of allowing money to control you. It helps you keep a track on your expenses and also helps you reach your financial goal. Budgeting is keeping account of your income and expenditure and being able to successfully manage your financial affairs.
Some of the benefits of budgeting are:
• Planning for major financial changes
• Making long-term and short-term projections about your financial situation
• Make money work for you
• Provide a safety net in case of financial crisis
How Budgeting Can Help Military and Veterans
• Provides Financial Knowledge
Budgeting allows you to know exactly how much money is coming in and how much is going out – down to the very cent. So it will make you realize whether you spend most part of your money on important things or not.
Budgeting will help get things organized and provide warning signals in case of potential financial problems.
• Creates Opportunities
Budgeting will create opportunities for you to take better decisions regarding your finances.
• Provides Clear Objectives
A clear budget will help you strive towards financial goals. It helps you stay focused on your long-term plans like purchasing a new house or paying off a mortgage, etc. You will be able to give more importance on your top priorities and give up those petty expenses.
How to Start Budgeting?
There are several ways you can start budgeting. You do not need to use expensive budgeting software to get started, all you require is a notebook and a pen. Of course if you are well versed in using budgeting software, you can go ahead and use it.
• Notebook and Pen
The easiest and least expensive method of budgeting is by using a notebook and pen. You can start by making note of your income and all expenses. Though it could be a bit tedious to track your long-term spending, it is one of the least expensive methods of budgeting.
If you use a computer, you can use either Microsoft Excel or Open Office to use a spreadsheet program. With a spreadsheet it is easier to track your income and expenses and perform other calculations. Spreadsheets are ideal for working with long-term financial goals and can be updated easily.
There are several programs that can be used for budgeting; however, they might need to be upgraded every few years. Budgeting software programs can do more than just keeping track of your income and expenses, they can also keep track of your investment portfolios and bank accounts.
With proper budgeting military and veterans can succeed financially. Go with the system that is best suited for you. If you are tech savvy, you can use some budgeting apps. If you are not too comfortable with using the computer or programs, you can use a simple notebook and pen to budget your income and expenses.
This post is written by James Rudd, a Veteran of the U.S. Navy and an authority on Military and Veteran finances. Visit his website at militaryfinancialadvice.com for more military financial advice.