Have you ever wondered how to go about creating a basic 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 or even a savings account is a major benefit of budgeting. I learned how to create a budget several years ago and this knowledge 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!
Welcome to Budgeting 101 kids. My first step to success is to figure out what you consider your end goal. What are you trying to achieve with budgeting? A large family trip, an emergency fund, paying down debt 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 and also see how realistic these goals are as a group or individually.
Now that you know what your ultimate purpose of creating a budget is; it’s time to set a goal. Usually I have one or two separate goals each month. Goals can be anything from eating out less to putting more of your paycheck into savings or investments. It’s truly up to you. Shoot hard to reach that goal, the feeling of accomplishment far surpasses any feelings of loss in fun or entertainment you might anticipate by putting yourself on a budget.
It’s the moment you’ve been waiting for. It is now time to create a budget. How do you do it? 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. Next, I write down what kind of payments I need to make that month and how much those will cost. Any expenses you have should go on the paper. The next step is to write down your income. Now do some math and subtract everything from your income 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?
One of the first things to realize is that everyone of us struggles because of subscriptions that we do not need, gym memberships that we do not use or by spending money thoughtlessly. If you were to reign in your spending by creating a budget and changing a few of your spending habits, you would see an immediate and positive change in your financial situation. Thousands of people are stopping off to pick up a quick coffee or a cold pop with crushed ice every single day. I am not saying quit this entirely but, what I am saying is that if you were to follow a basic budget and do this once a week instead of every day, you would see an immediate improvement in the amount of money you would be able to save every week. Budgeting 101 is just getting an idea of how to create a budget that is not only realistic but doable in your busy life.
Having a deadline and milestones is what I would consider the most important part of this all. A deadline for your budgeting will light 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, this will help you to stay focused on your budget goals and it is a good habit to get into for many budgeting reasons. If you put all of the ideas on this website into practice, they will help you achieve your financial goals and you will over time see to it that you have a worry free future. All it takes is a few minutes each day, dreams, goals and a budget.
Finally! You’ve reached your goal! Now you have some money to spend on repairing that car or fixing that heater or better yet, buying a home or going to a University. Whatever the end goal was for you, money comes and goes; so, don’t feel guilty about spending a few pennies here and there, just make sure to jot them down on your budget! If you find that you have been too loose in the allowance that you gave yourself, make sure you take a mental inventory and write down in your journal ideas that would help you to create a budget that is going to keep you more mindful of your spending by restricting the amount you allow yourself to spend on a daily or weekly basis. You can still spend money, you just should be aware of where you are spending it and how much you are spending when you do spend it and of course if it was budgeted into your calculations to be spent in the first place.
That was the quick rundown of how to create a budget for each month. This was fairly simple and a relatively short budgeting guide compared to the other articles in the basic budget 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.