I know many people hate the thought of being put on a budget, but it really should not be that way. Why? Well if you correctly setup and keep track of your budget it will help you, at a minimum, keep track of where your hard earned money is going. Most of the time people are amazed at how much money they are spending and where the bulk of their money is being spent.



Well let's get down to brass tacks on how to setup your budget. The first thing you want to do is to setup a spreadsheet either on your computer or on paper. You will want to create categories for Income and expenses. For Example:

Monthly Income:

Main Job 2500

Extra Job 1210

Total 3710

Monthly Expenses:

Mortgage Payment 1800

Utilities 75

Car Payment 350

Gas / Diesel 200

Car Repairs 60

Groceries 800

Insurance 100

Misc. 100

Entertainment 150

Savings 25

Total 3635

Net Income +/- 50

You can add as many categories as you deem necessary. In the example above you can see that you will have $50 left over for emergencies. You should make every attempt to track every dollar spent.

You will notice that things will get better simply by you being made aware of what's being spent and where. The reason is most people are surprised at what they spend in certain areas so they start decreasing the amount they spend in that area.

How can you use this information to make things better for you and your family? If you are in the negative each month are barely making it then you either need to add more income or reduce spending. One-way to reduce spending is to take a category like gas / diesel and take the necessary steps to reduce the amount next month. One example would be keeping a list of things needed at the store. Make fewer trips in your vehicle. If you make a list you can go less often. The list will ensure that you don't forget things, like we have all done, and have to go back spending more fuel. Depending on your specific budget you will find many areas that need to be evaluated and reduced. If you want a new car then start an expense savings account category whereby you allocate so much each month that gets put into a savings account for that sole purpose.

If you know for example that you are going to be spending more money in one category the following month you can take steps early to cut back in others.

I have only skimmed the surface, but you have to understand where your hard earned money is going and take control of your future. You will be amazed at the difference being on a budget can make. Please feel free to read both this article or one of my many others by visiting my link in the resource box below. I always enjoy getting emails pertaining to my articles or my site. Your feedback is important to me.

No matter what your income is you should be on a budget!