Would you like to know how to budget for financial freedom?
“Financial freedom means that you get to make life decisions without being overly stressed about the financial impact because you are prepared. You control your finances instead of being controlled by them” (Dave Ramsey).
Successful budgeting is one of the important steps towards gaining financial freedom. But knowing how to budget well can be tricky.
If you want to make sure your budget is sustainable, these amazing tips will help you achieve success.
To help you improve on your budgeting skills, we are very pleased to share a special guest post by Amanda from HighTower Boca Raton.
Who are HighTower Boca Raton and how can they help?
“HighTower Boca Raton is YOUR independent-minded financial advisor, laser focused on your unique needs and objectives. We are fiduciary advisors. We don’t just tell you we put your best interests first, we have a legal obligation to do so.”
Knowing that High Tower has our interest at heart puts our minds at rest. Amanda explains what you must know and consider so as to budget well.
Are you ready?
Understanding Variable Vs Fixed Expenses To Plan Your Budget For Financial Freedom
Whether it’s your personal budget or business, it’s a top priority to strategically plan your budget to achieve financial freedom.
Financial freedom isn’t about being able to buy anything you want,but being ready to spend money in the right places.
A strategic budget starts with the right decisions, one you can make with a financial advisor in Boca Raton.
In order to budget wisely, you need to know the difference between variable and fixed expenses.
What are Variable Expenses?
Variable expenses are those that financial advisors which financial advisors Boca Raton refer to as ever-changing costs.
These can be utility bills including water and energy, phone bills and business taxes and labor costs.
Variable expenses can rise and fall depending on external factors like market demand, so there’s no way to control the costs.
However, you can minimize these expenses by practicing frugal habits such as turning off appliances when there’s no one around and buying energy efficient appliances that consume lower watts.
For businesses, you can save on supplies and operating costs by finding quality suppliers with the lowest offers.
What are Fixed Expenses?
Fixed expenses are costs you can control and that are at your discretion.
Insurance, monthly subscriptions, loans and rent are examples of fixed expenses.
Bear in mind though that fixed expenses like rent can still go higher with notices from landlords, so it’s a good idea to budget wisely by maintaining a healthy cash flow.
How To Budget With Variable and Fixed Expenses?
Categorize Your Expenses
Now that you know the difference between fixed and variable expenses, write down every expense you have at home and in your business and categorize them accordingly.
If you have more variable expenses, make steps to cut down on these expenses by having a revolving fund and an emergency fund that will cover for estimated costs and still leave room for extra.
See how my Emergency Fund came to my rescue here.
Plan How Much You Are Spending for the Year
A yearly budget is much more flexible than a monthly budget as financial advisor in Boca Raton advised.
Research market prices on your fixed expenses and estimate the variable expenses.
In this way, you’ll be much more prepared to pay for extra costs.
Compare Estimated Budget Over Actual Budget for the Year
See how much you’ve spent at the end of the year and compare it with your estimates.
In this way, you’ll learn how to stretch your budget even further for the next year and be a better manager of your finances.
Financial advice is something we all need when it comes to managing our money.
Attain financial freedom with the right counsel and right decisions in life.
Find out about budget apps and to tools to help you save more money.
Comments by More Money Tips
Thanks so much Amanda, for contributing this very informative and helpful article. Now we have a much clearer idea of how variable and fixed expenses affect our budgets.
Among the many useful points that Amanda has made, I really like the point about a yearly budget being more flexible than a monthly budget.
Why you still need a monthly budget
But that doesn’t mean you need not have a monthly budget or can throw out your monthly budget plan.
A monthly budget is still valuable as it allows you to achieve short term goals and examine your budget on a microscopic level.
In short, it helps you to track your spending and saving more closely.
Why you still need a yearly budget
A yearly budget gives you an overall view of your spending and saving pattern.
It’s useful as it helps you to make long term plans to achieve your ultimate dream : Financial Freedom.
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