Making a Budget

Making a budget is one of those necessary evils we need to do in order to live within our means. No one ever said it was fun, but if you face your finances head-on you will be better off in the long run. To begin your process, sit down with all your bills and list them out. Keep track of the money payment due and the remaining balance. Now that you have that list, carry a small tablet with you for the next two weeks and document every single penny you spend. Do not really try to change your spending ways at this point. This step is to show you how you spend so that you will know how to change or improve your spending habits.

Now that you have a pretty good demonstration of how you spend money, add into the process any and all income. All variables are now present. On your expenses determine those that are fixed and will not change month-to-month. Subtract that dollar figure from your monthly
income. The remainder is what you have available to deal with or the variable expenses. If cutting or realigning of expenses needs to be done, it will be here in the variable list. Determine how your remaining income covers those variable expenses. Do not forget to include a percentage of your income into savings.

Once you have your basic budget built, keep a very close eye on your expenses and do not forget to document all expenses. Usually paying with cash or that dollar in the soda machine or other spur of the moment expenditures are what throw off a budget. Stay alert and document. Over time you will be able to determine what can be added to your expenses or if you need to continue to tighten the purse strings.