Are you unable to save money? Does the fear of unexpected expenses keep you awake at night? Are you sick of living life paycheck to paycheck? Getting out of that pattern is easier than you think. Create a budget. It will force you to make more responsible decisions and it will help you achieve your financial goals.
Budgeting made easy
Get a small notebook and document everything. Each page of the notebook will be dedicated to a different component in building your budget.
- Page one: Your income for one month including dates paid and actual take home pay
- Page two through... : Write down all of your outgoing cash flow including that candy bar at the laundry mat, monthly bills, and savings account deposits.
Evaluate spending and prioritize expenses
- Add up your monthly income.
- Separate your expenses into "needs" and "wants".
Set your budget
- Add up your "needs" expenses. The total is the amount you need to save every month to cover your expenses.
- If your monthly "needs" expenses are greater than your income, you must find a way to either eliminate expenses or increase your income.
- If you have money left over after paying all of the "needs" expenses, split the remainder in half.
- Use half to pay down high-interest debt. Put the other half into savings. Think of it as insurance for unanticipated expenses.
Make a commitment. Take control.
Modifying your behaviors will be tough at first, but it quickly gets easier. When you're creating your budget, think of it as a road map to your financial goals. Time goes by quickly. One year from now you will be amazed by how far you've come and how much you've accomplished.