NBA all-stars score 20-plus points a game, while showing off their defensive prowess. A baseball all-star might log 25 home runs and 60 RBIs before the All-Star break. But what are the markers for those who excel at the more mundane skill of budgeting?
Whether you’re saving for retirement, paying off debt, or building passive streams of income, your long-term success rides on how well you can create and commit to a budget. You already know the basic tenets of budget-making: You add up what you make and compare that number to your expenses. Then, make adjustments with the intention of spending less than you make while moving closer to your financial goals. But you may not know why some people are so much better at budgeting than others. Here are eight things budgeting all-stars do that set them apart from the rest.
1. Save for the short term
Credit card debt is a budget killer, because it’s so easy to rack up and so difficult to pay off. When you roll over balances, those interest expenses quietly start eating up your hard-earned income. That puts pressure on your cash flow, and if you don’t cut spending in other areas, you’ll have to borrow more. It’s a terrible cycle.
The most reliable way to avoid credit card debt completely is to have a store of emergency cash…