How to Make a Strict Budget
The whole idea of a budget is to have more cash coming into your home than going out. People create budgets for different reasons. Some are tired of living from paycheck to paycheck. Others want the financial security it takes to start a business, retire, buy a car or send a child to college. Whatever your reason for implementing a budget, your discipline and determination will help you succeed.
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Instructions
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Write down a list of your total weekly, monthly or yearly income and expenses, depending on the time period for which you want to budget. The expense list should include the activity/bill and the amount of money spent on it.
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Subtract the total amount of your expenses from your total net income to get to an idea of how much cash remains after all expenditures.
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Review the expenses to determine which ones you can cut and which ones you can't. Some bills cannot be cut, such as utilities, rent and car note. Basic necessities, such as medications, groceries, laundry and personal hygiene products, cannot be cut.
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Reward yourself. Add an entertainment allowance to your expenses. This is important to reduce the possibility of burnout. Write down the amount you are allowing yourself to splurge or spend each pay period on entertainment and recreation.
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Create a final budget by subtracting final expenses (after all cuts are made) from total income. Stick to the budget religiously. To increase discipline, place your entertainment allowance in an envelope each pay period. Once it is spent, spend no more until your next scheduled allowance.
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Tips & Warnings
Shop for generic products as much as possible, to cut some of your expenses. Shopping in bulk also helps cut expenses.
Limit the amount of times you order take-out each pay period.
Limit the frequency of your entertainment and recreation. For instance, instead of going to the movies twice per week, go every other week.
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Resources
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