5 practices to better manage your budget and achieve financial freedom | economy

Forbes magazine, in a recent report by Tru Tamblyn, asserts that a budget is not just a spending tool, but “a personal roadmap that ensures every dollar is directed toward a meaningful goal.”

The report presents 5 effective financial practices that, according to the magazine, can transform an individual’s financial life towards stability and financial freedom.

1. Know your numbers

Forbes starts from the basic rule: You cannot manage what you do not understand. Before preparing any budget, you must know where the money actually goes.

The report suggests that you should track expenses for at least 30 days, even small ones like coffee or impulse purchases, using financial apps or even a simple notebook.

Tamblyn asserts that “tracking spending regularly promotes financial awareness and uncovers habits that are unconsciously depleting the budget.”

The report also explains the importance of distinguishing between fixed and variable expenses:

• Fixed items include rent, insurance, and loans.
• Variable ones, such as energy, food, and entertainment bills, are the most adjustable.

He warns against setting a budget based on total income, stressing that “relying on net income after taxes (and deductions) is the only way to avoid the monthly deficit.”

2. Choose the method that suits you

Forbes explains that there is no single perfect way to budget, but rather it must be workable and sustainable.

The magazine reviews 3 main methods:

• The 50/30/20 rule50% is allocated to needs, 30% to desires, and 20% to saving or paying off debts, with the possibility of adjustment according to goals.
• Zero-based budgeting: It means allocating every dollar at the beginning of the month so that income minus spending equals zero, to ensure complete control of the money.
• Cash envelope system: A method that relies on allocating specific amounts of cash to categories such as food and entertainment, and stopping spending once the allocated amount is exhausted.

“The best approach is the one that sticks to you consistently and fits your financial personality,” the report says.

3. Be goal-oriented

Forbes points out that a budget without a goal is nothing more than a soulless table of numbers. It recommends using the SMART approach to setting goals, which should be:

• Specific.
• Measurable.
• Realistic.
• linked to time.

Tamblyn gives a realistic example: “Instead of saying I want to save, say I will save $5,000 for a trip next December.” The writer also advises adopting the “pay yourself first” rule, that is, considering saving as a fixed monthly commitment before any other expenses.

He adds, “Paying off high-interest debt should be a priority, because it represents a burden that prevents long-term financial progress.”

4. Activate spontaneity and be prepared for surprises

Forbes confirms that financial success does not depend on daily willpower, but rather on intelligent systems that operate automatically, and the report indicates that “automating payments and invoices through banking applications ensures no delays and reduces errors.”

It is also recommended to create a fund for irregular expenses, such as annual insurance or real estate taxes, by allocating a monthly amount in advance to avoid surprises.

The emergency fund must cover at least 6 months of living expenses, and be placed in a separate account designated for emergency cases only.

5. Review, edit, and be patient

The magazine describes the budget as “a living document, not a static contract,” and recommends reviewing it monthly before the start of each new financial cycle to compare the plan with actual results.

Tamblyn stresses the importance of flexibility: “If you exceed a certain item, such as food expenses, do not give up, but rather adjust the plan temporarily,” and adds that discipline is more important than perfection, as mistakes are a natural part of financial learning, and consistency is the key to success.