DIY: Budget
Creating a budget helps control your spending and keep more money in your bank account. The more careful you are about money and how you spend it, the more money you gain for savings, vacations, and other things. Though the idea of setting a budget may seem difficult or frustrating, getting your finances in order may be easier than you think.
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Instructions
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Sit down with a pen and paper and calculate your monthly income. Include money you get for side projects and how much your spouse contributes. The first step in building a budget is knowing how much money you have to work with each month.
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Make a list of all the necessary expenditures in your life. These will likely include groceries, phone and utility bills, clothing, and commuting costs like gas or transit cards. Total these up to get a rough number representing what you have to spend each month.
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Look at your bank statements for the last few months. Check your math regarding important expenditures and make sure you did not forget any critical bills.
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Examine your spending patterns for problem areas. For example, spending $10 on lunch may seem small, but if you do it every workday it totals up to two hundred dollars a month. Look for spending trends of this nature.
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Create a budget with three categories: bills, groceries and fun. Each category should have a set total for the month. For instance, if your bills total up to be $1,000 a month, that should be the total for the bills category.
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Look at the total cost of your budget compared to your total income. Ideally, once you subtract your three budget totals from your total monthly income, you will have money left over. That money should be put into a savings account or other investments.
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Tips & Warnings
Creating and sticking to a budget is one of the best ways to increase your wealth, lose a lot of financial stress, and prepare yourself for possible financial emergencies.
