How to Budget Your Money
By: Sarah Emerson | Date: February 5 2018
Are you aware how money you spend monthly on little things sort of a soda at the shop , or a cup of coffee at Starbucks? When an emergency comes up, does one end up scrambling to hide the cost? Is your mastercard debt increasing as you charge things because you don’t have the cash to buy belongings you need (or want)? Are you living paycheck to paycheck and run out of cash before pay day? does one ever see something you would like to shop for , but you’re unsure if you’ve got enough money to buy it?
If you answered yes to any of those questions, then your money is on top of things of you.
That’s the bad news. the great news is it doesn’t need to stay this manner . now’s the time to urge realistic about your money by producing a budget. you’ll be thinking that a budget won’t help because lack of cash is your problem. Lack of cash may contribute, but a budget will confirm you’re spending every dollar wisely. And it’ll force you to require an honest check out your finances, and make needed changes.
Use a Spending Log
In order to make a budget, you want to first determine where you’re spending your money, and why you’re spending your money. i like to recommend taking anywhere from a couple of days to a full month to collect this information. I can’t stress enough the importance of this step. it’s going to appear to be a simple one to skip, but the knowledge you gather are going to be invaluable in creating your budget. There are two ways to do this
- the old-fashioned way with a paper spending log, or
- just pay everything electronically and then export the data from your online banking or app
Some tips for the spending log
- Print out several pages of an empty spending log, you can find them online easily. Or – the method I preferred – take a very small notebook, and use it. This way you don’t have paper lying around and it can be easily transportet.
- More important, make some kind of bin for invoices, best close to the entrance door. Take every receipt and once you enter the door you put I in the bin.
- You may complete this spending log daily as you spend money for a month, or complete it using information you have at home. This includes bank statements, utility bills, spending receipts, or any other records which shows spending.
- For every dollar you spend, write the date, the description, the category, and check whether it was a need or a want.
- Consider these categories, and add any unique to your situation: housing, utilities, food, clothing, insurance, medical, entertainment, transportation, credit cards, loan payments.
How to Build Family Monthly Budget
Now we’ll put together your budget. We’re going to use the numbers you collected on your Spending Log to create your budget, and we’ll use a spreadsheet from the google Docs template library called the Monthly Budget to do it. You can access it here .
Now please don’t get scared by the term spreadsheet – the hard part has been done for you. If you can type in numbers, you can use this spreadsheet!
The spreadsheet is very easy to use, and will give you an easy and accurate picture of your spending and income.
Planned Spending & Income Instructions
- For each category, add your Planned Spending – what you plan on spending each month.
- Add your Planned Monthly Income – the amount you normally bring home each month.
- The spreadsheet automatically keeps track of your balance.
- If the number in the Planned Balance Column is black, your income is higher than your spending. That is good.
- If the number in the Planned Balance is red, your planned spending is higher than your planned income. You’ll need to lower your planned spending.
Actual Spending & Income Instructions:
- Follow above instructions, but now enter in your actual spending for each category, and your actual income.
- The Actual Balance automatically calculates and shows your final totals for the month!