-
Step 1
Sit down and write down all of your expenses for a month. To set a realistic budget, you need to know where you money is going now. If you have no idea where you spent all of your money last month, you have more work to do. You will need to keep track of every penny that you spend for a month to get a good idea of all of your expenses. Keep a budget diary to help you chart every time that you spend money.
-
Step 2
Calculate how much money comes into your household every month. As you calculate income, do not take into account any bonuses or commission that you make. This is not money that you can depend upon getting every month. To make a realistic budget that you can live with, you need to use income that you know will be coming in every month.
-
Step 3
Plan out how you are going to spend the income that you make every month. You will start by listing the set bills that you have to pay each month. Examples of these are mortgage, phone and insurance. The next set of expenses will be the ones that vary from month to month. Try to average what you think you will spend every month. These expenses are food, clothing, and often entertainment. You want to make sure that your expenses are not greater then your income. You should have more then enough income to pay all expenses for the month comfortably and still save some money. If this is not the case, you will need to cut down some of your expenses like eating out and the movies to make a realistic budget that you can live with.
Comments
cadence said
on 1/13/2009 Great tips. Setting an unrealistic budget will drive you crazy, and you won't be able to stick to it.