How to Make A Balanced Budget

Creating a budget will give you a firm handle on your finances.

Creating a budget is the first step to successful money management. Trying to manage your finances without one can lead to stress and chaos. Simply follow a few basic steps and you will create a budget that will help bring order to your financial picture.

Instructions

1. Make a list of all monthly expenses. Include every fixed bill. If they fluctuate, go with the amount of the highest bill you have ever received. Make sure to include food, gas, toll money and every other expense you have throughout the month. If you don't save gas and food receipts, estimate again on the high side to be safe.

2. Write down your total net income from every source --- salary, investments or odd jobs. If your monthly income varies, use earnings from your low months.

3. Tally your total income and expenses. Then, subtract expenses from income. If a negative number remains, you are living beyond your means. Try cutting some unnecessary expenses that you can live without. If you are still at a negative, substitute goods for comparable but cheaper (discount) products. Maybe try shopping at discount food stores or buying in bulk.

4. Put any leftover money into a savings account for emergencies. Your goal is to still have money remaining, even after putting some away in a savings account. This can take a while and is sometimes never achieved; however, it is a good feeling to know you are living within your budget.

References

• Online Learning for Sports Management: Budget Principles