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Step by Step Guide To Budgeting


After you decide to get financial advice, and figure out when to pay off your mortgage (if you own a home), you need to understand budgeting...

The first step in financial budgeting is to assess what you've got and what your target is. Take some time to clearly visualize what you want your life to be like. You really should be setting up yourself to win this race because although we’re all in the same race, some of us are going to end up at the finish line a lot faster—and a lot wealthier.

Unfortunately, some of us are going to be struggling, and huffing and puffing to actually get there. And the people who are really struggling are the ones who have not set up properly; they are constantly zigging and zagging throughout their entire life trying to set something up without following a proven plan.

If you follow a proven track plan, just as you follow a proven recipe when cooking - your life menu - will turn out pretty good.

As for the menus themselves, how would you cook? Do you bake or grill or fry? Do you serve raw food or natural food or fast goods? How does that relate to your everyday lives? Since we all have very busy lives and we’re at different ages and stages, we need to try to eat as best we can.

In my life I sometimes have to eat on the run! So you might call my menu a raw diet - some fruit and vegetables, perhaps an apple or carrot sticks. This relates to those of us who probably do things very quickly. We look at our finances too quickly, and sometimes we might not make the right choices.

And if you look at going into baking or grilling or frying, you may be involved in too many different things. To make your recipes work, you need to spend time here in all those different areas to make sure that your ultimate recipe from baking, grilling or frying comes out right.

And it's the same with looking at things traditionally. In the past our mealtimes have been breakfast, lunch, and dinner, but we now know that eating smaller meals on a regular basis is more important and better nutritionally.

In other words, on the financial side, make sure you've got the right information. Make sure you're looking at things on a regular basis. Make sure your menu is really going to useful to help you attain your goals.

That “smaller meal” analogy is truly practical because it enables you to put away a little at a time. Rather than putting away big chunks of money every single month, you could put away little pieces every week. Or a little bit aside on a daily basis. This is less scary for you.

For me, I enjoy the fun of planning. Keep asking yourself these questions: "What do I want to achieve?" "What are the things I want to do?" "How am I going to do this?" For example, when I’m having a dinner party and I’m cooking in the kitchen with my wife, we are always asking “Well, what are we going to do?” Planning is the fun part. It’s understanding the person you are, the meal you want to prepare, the finance you want to have, the life you want to have.

This planning process can be broken down into three different systems—or three different tactics:

• Have the right vision.
• Have the right plan.
• Be consistent and persistent.

Quite naturally, you spend a lot of time on where you are now. How important is it for you to know exactly where you are when you're starting to cook?

As I said before, having the right vision is often the hardest part of budgeting for most people because we're so busy in our daily lives. We don't actually take the time to sit and wonder about what are the things that we want to do. But, it’s very important that you assume you've already got the money to do these things. And it's a lot more fun, too, because you can visualize so much easier if think, "I've already got the money. I know I'm going to go and do this. I know I'm going to have a new car. I'm going to buy the house. I'm going to do the trip. I'm going to do all these different things."

Having the vision is what gives you passion. This passion is what makes you want to get up in the morning and go after those things.