Many people want to budget but don’t know how to budget the proper way? Don’t worry if you don’t, growing up in school we aren’t taught how to budget our money so it can be a bit hard. Budgeting might be a bit hard to learn in the beginning but you can get the hang of it with some practice.
1. Sit down and set your mind. Okay, so you have decided that you want to know how to budget. But there is a more important question that you have to decide upon on, why do you want to budget? You might think that it is not important to figure out the reason behind your plan, but it is. Whether you are doing this as a means to fix your over-all household finances or simply as a practice you wish to experience, you must have a clear idea as to WHY you are doing this. Knowing the reason is important in a sense that this will be the backbone of your plan, so take it seriously.
2. Planning. You can do this anytime,have seat down and take out a pen and paper or open your computer. Now write down the exact amount of your income.
3. Below your income, start writing down all your regular expenses. Big or small, put them down. Then, look at all the expenses you have listed, determine which the important ones are for you to keep and work with.
4. Among the not so important expenses, start crossing out the ones that you know you do not really need.
5. From the remaining list of over all expenses, start dividing your income into categories. Now, the division you allocated for each of the expenses will be the “ceiling”,or greatest dollar amount of your allowance for that. Meaning, whatever the case, you must not go over that limit.
6. Put your planned budget into practice.
These are the basic steps in budgeting, as you go on on you will get better at it, no one is perfect at anything from the start. Realistically most people will not have a workable budget at this point, again it’s not really your fault if you don’t have a budget, because nobody ever took the time to show you how to set up a budget, much less help you stay on a budget.
It doesn’t take a rocket scientist at this point to figure out that you should reduce your nonessential spending habits and that’s what they usually are is habits, they are your wants, not your needs. Cut your expenses down so you have some money left over at the end of the month and you now have your first monthly budget.