Was one of your resolutions to start a budget?
Working with numbers can be very
intimidating. The thought of developing a household budget can be
overwhelming. This may explain why so many people haven’t created one.
Even a simple budget can uncover ways to save money. Here are
some quick, easy-to-follow tips on how to start.
The easiest way to begin is with
these three basic steps:
- Add up your income
- Track your spending
- Make it balance
Create a simple budget worksheet for
each month that itemizes expenses to better track spending and record income. Sort expenses into categories that make the most sense to you.Typical categories include:
- Housing
- Utilities
- Transportation
- Food
- Household expenses
- Entertainment
- Savings
Create a one-page sheet for each
month containing these categories to follow where and how much money is being
spent. Most people starting a budget are surprised at how much goes toward
non-essential, entertainment or convenience expenses like:
- Fast foods and drinks
- Buying on impulse rather than for need
- Carrying a credit card balance rather than paying in cash
- Extra entertainment
- Cable with movie channels
- Buying books rather than using libraries
- Dining out frequently for meals rather than packing a lunch or eating at home
- Extra cell phone features
- Club memberships
Each month, sit down and review last month's budget to see if you stuck to it and what areas you may need to adjust for the coming month. Write out a new budget plan with the adjustments made.
Anyone having financial troubles or wishing to increase their savings will be able to use a household budget to identify and cut back in many of these areas. Others will be pleasantly surprised at how a well-managed budget will make it easier to save for future purchases and retirement.
