Think of a budget as a road map that can get you where you want to be financially. Of course, a road map is pretty useless if you don't know where you want to go! In order to plan the financial future you want, you have to know what that future entails. That means writing down some goals.
Do you want to get out of debt? Are you hoping to make a major purchase soon, like a house or a car? Are you concerned about your future and want to set something aside? Or, are you just trying to make ends meet? You might want to start a "just in case" emergency fund so you're ready for any unexpected surprises. These are all important considerations when imagining where you want to be.
1. Close your eyes and think about the future you want. Don't be afraid to dream big, but be practical. We all want to retire at 25 and live on our private yacht, but this is about building a practical plan.
2. Think about the timetable. When do you want to be able to buy that house? When would you like to be debt-free? It's not enough to have a goal. In order to reach it, we have to know when our "deadline" is.
Write down your goals and put them where you can see them every day, like your bathroom mirror or refrigerator. It's important to keep them in mind regularly.