Budgeting money can be tough work especially if you’re having a hard time tracking where all your money is spent. Budgets are necessary for most people, they’re a practical way to get a grip on your spending – and to make sure your money is being used the way you want it to be used.
In this article we will give you some tips to follow on how to budget your money;
Here are the steps:
Understanding How You Spend Your Money
Write down your total take-home monthly income, and then write down all your expenses in a month- as most bills come monthly. This is where you identify and separate your monthly bills with those you spend on a daily basis, for monthly bills examples are, rent, mortgage, car payments, utilities, cell phone bill, internet and credit cards are all also known as fixed bills.
Identify the Essentials
These are the bills that you expect to come but their amounts may vary – examples may include your phones, utilities, food, household expenses, gasoline, medication, public transportation, shoes and clothing. You can estimate a rough amount and set it aside.
List the Non-Essentials
Set aside a reasonable amount for these expenses. Your list may include, entertainment, eating out, hobbies and other ways you spend money on a regular basis. This may also include the expenses that don’t occur monthly. Holidays and special occasions may be something that also need your budgeting along with an emergency fund.
Find your Totals
Add all your expenses and deduct it from your income, don’t panic! If you might end up in negative cash on hand or a little amount left on your money, remember that you are just starting a process to make it better. If you came up short, go back to your list and see what you can cut out, especially to those non-essentials! Keep going over the list until your expenses are less than your income.
Make a Plan
Track what you spend per day by posting post-its, by having a journal to keep track of daily spending, or other methods to keep track of where your money goes. By the end of the month compare what you have spent to the actual planned and this can be a basis on your next month plan.
More tips to come on other ways to track your spending and keep you on track to your budget plan to come!
These are just a few great tips you can follow to get started on your budgeting, Good Luck!