Have you ever wondered how to create a budget? Whether it’s for your business or for your family, a budget is very important. A budget that is properly configured and followed can be a blessing in your life. Being able to allocate the extra money to fun or productive activities is a major benefit of budgeting. I learned how to create a budget several years ago and it has treated me very well. Every month I reassess and keep my budget up to date. If you want to learn how I create my own budgets… read on!
My first step to success if figuring out your end goal. What are you trying to achieve with budgeting? A large family trip or an extra home in your portfolio, it all depends on what you want and when you want it. Generally, it’s not enough to say “I want extra money”, you must set a static amount to track the progress. Create a list of the top three things you want this year. By doing this you can figure out what types of end goals you have.
Now that you know what your ultimate purpose of creating a budget is; it’s time to set a goal. Usually I have one/two separate goals each month. Goals can be anything from eating out less to putting more of your paycheck into investments. It’s truly up to you. Shoot to reach that goal, the feeling of accomplishment far surpasses the feeling of loss.
It’s the moment you’ve been waiting for. It is now time to create a budget. How do you do so? It’s really quite simple. I first like sitting down with a notebook, a few different colored pens (I love variety), and my laptop. I figure out what my current finances are and write them down. I write down what kind of payments I need to make that month and how much it’ll cost. Any expenses you have should go on the paper. The next step is to write down your income. Now do some subtraction and figure out how much money you have left. If you have no money left and are in the negative, it may be time to reconfigure your monthly expenditure. Do you really need that $200 a month cable plan?
Having a deadline and milestones is what I would consider the most important part of this all. A deadline will lit a metaphorical fire under your butt that’ll keep you on the right track. At least that is how it works out for me. Keep a daily journal to write down your financial accomplishments each day and just what’s on your mind. All of this will help you achieve your goals of a financially free future. All it takes is a few minutes and a budget.
Financially! You’ve reached your goal. Now you have some money to spend. Money is meant to be spent; so don’t feel guilty about spending a few pennies here and there. However if you feel guilt, you may want to figure out another place to spend money at. You should be happy of your purchases and not sad.
That was the quick rundown of how I create a budget each month. This was fairly simple and a relatively short guide compared to the other articles in the field. The trick is to apply a twist and find a method of budgeting that works for you. Adapt your methods each month to get the most out of your budgeting efforts.