Creating A Budget
Time to talk $$$. Managing is more important than ever, but let’s face the word budget is enough to send some running for the hills. So, let’s just get to the gritty facts.
First you are going to gather all of your financial information. Did out all of those loan payments, cable bills, mortgage payments, insurance statements, etc… If it is something that you pay off you are going to need it. After collecting this info it is time to calculate all sources of income.
Next start calculating and listing expenses. Start with fixed costs:School loans Mortgage Payments Car payments Cable Bill Insurance Healthcare Bills (reoccurring) Electric Sewer Rent Use the bills that you gathered to help you calculate all fixed costs.
Now look write down on the variable costs. Receipts can help give you an idea on what you spend on these:Gas Heating Oil Clothing Groceries Eating Out Entertainment Personal Care Pets School Supplies Art Supplies Public Transportation Coffee Shops Anything that you can think of that you spend money on should be recorded here.
Okay, you have everything written down it’s time to balance your budget. Do you out spend what you make? Are you spending more in one area than you would like? If so it’s time to cut some fat. Set limits for yourself on spending on the variable expenses. Maybe eat out once a week instead of three times. Set aside a certain amount of money for yourself each week as “mad money.” Most importantly don’t forget to budget in a safety net each month incase something happens. Shit happens. Cars break down. Gas prices rise. Don’t make your budget so tight that you have no room to breath.
One last thing. Don’t forget to budget in money for savings. There are many great sources for creating and tracking your budget online. One of my favorites is Mint.com.
Do you have a budget? Has it worked for you?