Next, your goal should be to save 10% with the purpose of investing toward your financial freedom. To better understand this principle read “Saving 10%” under the Investing Principles category.

In order to control your expenses you have got to have a budget. Most people do not budget their finances and that is the reason why most people have financial problems. When you know where your money is going you will not overspend. 

When creating a budget for your family the single most important thing to remember about budgeting is to have one. The second most important thing about budgeting is to follow the one that you have.

There are so many different budgeting systems out there that if you ask a hundred different people you would probably get that many responses back. But the most common response would be a question mark that forms over person’s head.

Individuals who do not have some sort of budgeting plan often find themselves in financial trouble because what you do not manage soon becomes out of control. What would your children be like if they were allowed to do whatever they wanted? How successful would a company be who did not manage their employees?

After a year of first hearing the concept of budgeting did I decide to start taking money management seriously. At that time I did not have enough money to pay all of my bills so I thought what is the point in managing something that you do not have?

But, what I failed to realize was that the reason I did not have any money was due to the fact that I was not budgeting what I had. I am not concerned about how much money you make, because if you let me budget your income not only will you be less stressed but you will also begin to build your way to wealth.

In the beginning I only began to budget my money so that I could generate a savings. And I remember that I committed to myself that I was going to save 10% of what I earned no matter what. So after my first two week period I had a little over forty dollars in my savings account and I laughed because I thought that there is no way that this is going to amount to anything substantial but I was consistent. Within two months I went from making about $400 every two weeks to making over $600 a week. Again with my new job I still stuck to my plan and about 5 months later I had about $2,000 in savings.

There is a Proverb that says, “He who is faithful with little, will be faithful with much.” If you have a detailed budget plan when you are making a little bit of money then when you start to make more money the only thing you have to do is add zeros to your plan and nothing else will change. As my dad used to always tell me, “The only difference between $1,000 and $1,000,000 is only a couple of zeros.”

Here is how I began. First I had a mentor in my life who explained to me the importance of budgeting and how if I was to begin now, I was 22 years old, then I would be set in the future. So I had faith in them and decided to follow their advice. They let me borrow a CD series called the “Automatic Millionaire” and I am telling you that the system used in this series has really changed my life.

David Bach’s explained how to set up an automatic withdraw system from your checking account into a savings account so you do not have to think about saving the money. Shortly after that I took a course titled “Crown Financial Ministries,” that taught me how to pay off my debt, get an understanding of my true financial situation and then to create a detailed budget. This system was amazing as far as teaching me the principles of budgeting, investing and saving. However, that system involved too much detailed for my personality however, I continued to use the system until I read the book, “The Secrets of a Millionaire Mind.” Out of all the budgeting systems I have come to know this is the one that I like the best.

According to the system when you receive your pay check you split your money into six different areas. These areas are 50% Living Expenses, 10% Give, 10% Education, 10% Financial Freedom Account, 10% Long Term Saving for Spending, and 10% for Play. The living expenses cover items such as groceries, gas, rent/mortgage, utilities and the like. Give would be the tithe for the church, or other non-profit organization. Education is so that you will have money set aside to help you learn better strategies on how to invest your finances and to increase your mind which is the most important of all investments. Financial Freedom Account is only to be spent on residual income, or money that makes you money without you having to work for it. These last two are the fun ones. The Long Term Savings for Spending is giving you license to save up for the flat screen television that you wanted, or the motorcycle you have always dreamed about. And the Play Account is so that you can go out to eat, go to the movies, get your nails done and do other activities that make you feel like you are wealthy.

Now I understand that most of you cannot live on 50% of your income. I could not either when I started but the point is to start where you are at. Break these percentages down however you like but again the most important thing is that you have a budgeting plan in place and are using your plan.

This really hit home when I purchased my first business. The budget that I was given had numbers that were inflated by as much as $50,000 in some areas. Because of that I spent like that money was going to be there and when the day came that proved the numbers to be false was a very sad day.

My budget was so far off that I did not know in what areas I should spend and in what areas I should save therefore, I spent and spent till there was nothing left. A budget is your financial roadmap that will lead you to destination financial freedom. However, your budget must be an honest one because if you inflate the numbers the only person you are hurting is yourself. Therefore, read some of the material that I recommended to you and read the other articles written in the Personal Budgeting section but please begin to budget so you can start your journey towards a life of financial freedom.