How to Develop A Personal Financial Budget For Yourself

Do you ever find yourself short just before pay day? Running over on your checking account? Not sure where all the money is going? Maybe you just need to create a simple budget for yourself, one that you can live with. When you follow your money and create a simple budget, you take the guesswork out of where your money goes, rather than just spending in the blind. You may even discover that you will have money left over when you are paying closer attention to your spending.

Instructions

Difficulty: Easy

Things You’ll Need:

• Ledger or notebook paper
• A basic calculator
• A record of your average 30 day income
• A listing of all regular expenses, such as mortgage, rent, credit cards, utilities, day care, etc.
• Pocket size note pad and pen

1. Make a listing on your ledger of all of your regular expenses as mentioned above. These payments usually reflect checks you sit down and write on a regular basis. Also write down on your ledger the amount of income you receive on a monthly basis.
2. Add up your regular expenses for a 30-day period and weigh that figure
   against your monthly income. Whatever is left is the money you will use for the rest of your living expenses, such as lunch money, groceries, entertainment and any other expenditures throughout the month.
   This is usually the amount of money that is lost track of and just spent at will.
3. For the next 30 days you should record every dime that you spend within your pocket note pad--the amount and where it went to, even that dollar or two you may have left for a tip somewhere.
4. At the end of the 30 days, weigh all the money spent that is in your pocket note pad against your income that remained after your regular expenses were deducted. You may be surprised on how much you spent on, eating out, movie rentals or possibly even at the vending machine at work.
5. Now make a separate column on your ledger for lunches, gasoline, groceries, movies, and so forth so you can view and analyze each specific area.
6. See if there is something you can cut out or back on. Maybe bringing lunch from home once a week will make a difference, taking the time to use some store coupons or thinking more about your travel in the car. You can eliminate extra trips to the grocery store by thinking ahead more of what you will need in the future. Consider the possible fuel savings!
7. A budget is not meant to hurt you, but is meant to help you without depriving yourself. Most times just by knowing where the money went, it will allow you to make decisions on how to cut back on spending that may be unnecessary or even impulsive.
8. Based on what you know now, develop your new budget for the next 30 days. Ledger it out, and allow yourself so much money per day or week to live on, and try not to exceed it. At the end of the 30 days on your new budget, see how well you did and keep tweaking it as you go along.
9. Of course emergencies will take a precedence and could throw off any budget, but if you are successful with your new budget, you should have excess money in the future to put aside each month towards emergencies, vacations, savings, investments or holiday gifts, for instance. A good budget should allow for savings right off the top.

Tips & Warnings

• Take your time when you analyze your past spending and create your new budget and don't deprive yourself from leading the life you want. You just want to be wiser in your choices of spending.
• Try to allow for savings right off the top of your income, so you will have extra money for emergencies, vacations or investing for example.
• Remember to record even the smallest expenditures for those first 30 days.