Budgeting Basics

Do you ever check your bank statement and think you’ve been robbed? Money is hard to come by and even harder to hold onto—especially when not properly accounted for.

Some think the word “budget” is a bad word. Instead of thinking of a budget as something that restricts you, however, think about its efficiency. Having a savings and spending plan will help you achieve future goals, not to mention prepare you for unexpected events. Likened to a cushion, a savings account gives you something to fall back on.

So how does one master a budget plan? Follow these helpful steps for the perfect budgeting guide.

Calculate

You will need to know your net pay, the money left over after deductions. Included in this figure will be tips, supplementary income, side jobs, etc.

Needs vs. wants

Divide your budget into basic categories. You could make a list (housing, food, auto, entertainment, savings, clothing, medical, miscellaneous, etc.), or you can organize this list into the basics of needs (home and utilities) and wants (entertainment and clothing).

Expenses

Set your goal

Whether your hopes are to get out of debt or to start saving for your next vacation, a goal is a must, encouraging you to stick to your budget.

Save the receipts for every item you buy over the next month. At the end of the month, you will have an estimated figure of what you spend in each category, as long as there was nothing out of the ordinary like repair work.

Include the extras

When figuring your auto finances, for example, remember all that the category entails, such as the car payment, car insurance, gas, etc. The more detailed you are, the more likely you are to achieve success.

Stick to the plan

Creating a plan is one thing; following it is another. After the first month of budgeting, reevaluate your budget based on your spending. Maybe you

Add it up

Total your monthly expenditures, and compare it to what you make each month after taxes. You will need to choose which method best suits you to keep track of your budget. Some prefer computer software, such as Quicken or Microsoft Money.

didn’t need quite as much for gas as you thought you would. Maybe you needed a little extra for food. At any rate, as time goes on, you will learn to balance your account in a way that

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