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We work hard to earn a living in our virtual assistant business. So we should aim to spend our earnings wisely. We need to learn how to budget our personal finances if we want to enjoy profits in our business.

At a virtual summit for small business owners, one of the speakers made a valuable statement that resonated with me. She said that if you lack personal financial discipline, you will have difficulty managing finances in your virtual assistant business. That was definitely a lightbulb moment for me. It makes a lot of sense. 

That’s where a household budget comes in. (Download this free PDF and start recording your income and expenses.)

A household budget is a good tool to see at a glance what comes in, what goes out, and what's left at the end of the month (if any). Then we could decide how much of the balance we would put into savings. 

Before we dive into exactly what a budget can do for us, let’s consider this. What will happen if we’re not tracking income and expenses?

• We may spend more than we’re earning every month. In the long run, that can put us into some pretty hot water financially.
• We may overspend on wants and nice-to-haves like eating out, going to the movies, or shopping. 

Having a budget gives us more control over how we want to spend our hard-earned cash. Wouldn’t it be nice to have an actual choice? 

Here are 4 reasons why you should keep a household budget:

It Tracks Where Your Money Is Going 

You record where the money comes from each month (your income) and then list everything you spend it on. You usually start with your recurring monthly expenses like mortgage or rent, car payments, and utility bills. What’s left after all the bills are paid is your discretionary income. This is the money that you could use to treat yourself to a spa day, a vacation, or an expensive shoe you've been eyeing for some time.

It Helps You Identify Unnecessary Spending 

Having it all in front of you in black and white helps you identify things you’re wasting your money on. It makes you reconsider if you want to spend well over $200 a month on Cable TV or $150 on your large cell phone plan. Or how about that yearly magazine subscription to something you no longer read? Go through your expenses and reevaluate if this is REALLY how you want to spend your income. 

It Allows You To Be Proactive About Savings 

Saving money without a budget is hard. We go in with the best of intentions at the beginning of the month, but somehow there isn’t anything left at the end. 

A budget gives you a chance to be a bit more proactive. Set aside some money for savings at the beginning of the month, even if it’s just $20. Put it in the budget as a regular expense, just like you do with your other urgent bills. If you need to, open a separate savings account so you’re not tempted to spend it. 

It Ensures You’re Not Spending More Than Your Income 

Most importantly, your budget will keep you on track and help you make sure you’re not spending more than you’re making. And I don’t have to tell you that that’s pretty important for your financial well-being. 

How are you tracking your personal finances?

Share in the comments the strategies you use to stay on top of your finances.